Forever 21’s U.S. division has filed for Chapter 11 bankruptcy protection for the second time in six years, as the fast-fashion retailer continues to struggle with challenging market conditions. The Sunday filing marks another significant setback for the once-thriving mall staple known for its affordable trendy apparel.
Amid declining foot traffic at traditional shopping malls and intensifying competition from online retailers, the company has announced plans to conduct liquidation sales across its store network. Simultaneously, Forever 21 will pursue a court-supervised process to sell some or all of its assets.
The retailer has indicated that if a successful sale materializes, it may pivot from shutting down operations to continuing as a going concern. For now, the company has confirmed that its U.S. stores and website will remain operational, while international locations will not be affected by this filing.
According to court documents, Forever 21’s financial position is precarious, with estimated assets between $100 million and $500 million, while liabilities range from $1 billion to $5 billion. The bankruptcy filing lists between 10,001 and 25,000 creditors.
This second bankruptcy follows the company’s previous Chapter 11 filing in 2018, highlighting the persistent challenges facing traditional fashion retailers in today’s evolving retail landscape.
