NEW YORK: Fast-fashion retailer Forever 21 has filed for Chapter 11 bankruptcy for the second time in six years, signaling a likely liquidation after failing to secure a buyer for its 350 U.S. stores.
The brand, once a go-to for trendy, budget-friendly apparel, struggled amid the shift to e-commerce and the decline of American shopping malls. Founded in Los Angeles in 1984 by South Korean immigrants, Forever 21 expanded rapidly, peaking at 800 stores worldwide by 2016. However, mounting financial challenges led to its first bankruptcy in 2019, after which it was acquired by Sparc Group, a joint venture between Authentic Brands Group, Simon Property Group, and Brookfield Asset Management.
Now owned by Catalyst Brands—formed in January through the merger of Sparc Group and JCPenney—Forever 21 has initiated liquidation sales while exploring a court-supervised sale of some or all of its assets. Its U.S. stores and website remain operational, and international locations are unaffected.
The company reported estimated assets between $100 million and $500 million, with liabilities ranging from $1 billion to $10 billion. A successful sale could prevent a full wind-down, allowing operations to continue under new ownership.
Despite Forever 21’s uncertain future, Authentic Brands Group retains control of its trademark and intellectual property, leaving the possibility of a rebranded revival. CEO Jamie Salter previously called acquiring Forever 21 “the biggest mistake I made.”
This latest bankruptcy highlights the broader struggles of traditional retail in an increasingly digital landscape, as e-commerce and changing consumer habits continue to reshape the industry.
