Forever 21 has filed for bankruptcy protection for a second time and plans to close down its U.S. business as traffic in U.S. shopping malls fades and competition from online retailers like Amazon, Temu and Shein intensifies.
F21 OpCo, which runs Forever 21 stores, said late Sunday that it will wind down the business in the U.S. under Chapter 11 bankruptcy protection while determining if it can continue as a business with a partner, or if it will sell some or all of its assets.
“While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin,” Chief Financial Officer Brad Sell said in a statement.
The de minimis tax exemption lets shipments headed to U.S. businesses and consumers valued at less than $800 to enter the country tax free and duty free.
Forever 21 stores in the U.S. will hold liquidation sales and the website will continue to run while operations wind down. The retailer's locations outside of the U.S. are run by other licensees and are not included in the bankruptcy filing. International store locations and websites will continue operating as normal.
Authentic Brands Group owns the international intellectual property associated with the Forever 21 brand and may license the brand to other operators, F21OpCo said.
Jarrod Weber, Global President, Lifestyle at Authentic Brands Group, said the restructuring lets Forever 21 “accelerate the modernization of the brand’s distribution model, setting it up to compete and lead in fast fashion for decades to come. We’re building a direct creation-to-shelf model that moves faster.”
He added that, “We are receiving lots of interest from strong brand operators and digital experts who share our vision and are ready to take the brand to the next level.”
Forever 21 first filed for bankruptcy protection in 2019. The following year, it was acquired by a consortium of parties including Authentic Brands Group and mall owners Simon Property Group and Brookfield Property Partners. In early January, Forever 21’s parent company, Sparc Group, merged with JCPenney to form Catalyst Brands, a new entity that also includes brands like Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica.
In 2023, Forever 21 teamed up with Chinese e-commerce player Shein. The partnership allowed Shein to carry Forever 21’s items on its platform. It also offered the opportunity to return Shein online orders at a couple hundred physical Forever 21 stores across the U.S.
Forever 21 joins a slew of other retailers that have filed for Chapter 11 or are liquidating in recent months as retailers face a slowdown in consumer spending and are navigating rising operating costs amid inflationary pressures. They include fabric and crafts retailer Joann Inc and Party City. In February, Outdoor apparel seller Liberated Brands, which has operated stores for surfer and skater-inspired labels like Quiksilver, Billabong and Volcom, filed for bankruptcy — and said it plans to shutter its locations across the U.S.
From Jan. 1 through March 14, U.S. retailers have so far announced 3,735 store closures, according to Coresight Research's weekly tracker.
Forever 21 had been battling a host of macroeconomic challenges as well as its own issues.
Forever 21 was founded in 1984 and, along with other fast-fashion chains like H&M and Zara, rode a wave of popularity among young customers in the mid-1990s. Their popularity grew during the Great Recession, when shoppers were seeking bargains. But Forever 21 went on an aggressive expansion just as shoppers were moving more online. Critics have said that Forever 21 was too slow to embraice online shopping.
The company also faced stiff competition from the likes of Shein and Temu, which churn out trendy items that are cheaper than what Forever 21 offers. For example, Forever 21 sells T-shirts for around $10. Temu has them for $5.
Neil Saunders, managing director of GlobalData, said in a statement that part of the problem now is that Forever 21's stores are too big for its current needs and it's in malls with not enough foot traffic.
“Forever 21 was always a retailer living on borrowed time. Over recent years it has been hit with dual headwinds from a weak apparel market and stiff competition from cheap Chinese marketplaces,” he said. “Both things have eroded its standing and depleted its market share.”
FILE - Shoppers walk by a Forever 21 clothing store, Thursday, Oct. 24, 2019, in Tokyo, as the liquidation sale signs are posted on the storefront. (AP Photo/Kiichiro Sato, file)
KOCANI, North Macedonia (AP) — Municipal workers in Kocani dug graves Tuesday for the dozens of young people killed in a nightclub fire as protests were held in cities across North Macedonia.
Authorities said the nightclub blaze in the eastern town early Sunday was caused by indoor use of pyrotechnics and numerous safety violations at the venue, killing 59 people and injuring more than 150 during a live concert.
The fire has sparked outrage over alleged bribery and corruption linked to the safety violations at the nightclub.
Crews used excavators to dig rows of graves in Kocani as the town awaits the burial of young residents whose remains are still being processed for identification.
”It’s very bad, very bad. I have been crying for three days," resident Dragi Ignjatov said. "Children of our friends are gone. It can’t be worse than this, for Macedonia and for our city.”
Late Tuesday, rallies were held in solidarity with the victims' families, with thousands gathering in the capital, Skopje, holding up candles and cell phone flashlights during the nighttime event.
Pensioner Zoran Jovanovski said he hoped the tragedy would trigger reforms to fight corruption. “The solution is very hard. There needs to be a change in mentality ... a different way to run this country," he said.
Government officials appealed for calm after some demonstrations a day earlier had turned violent. Protesters in Kocani overturned a van, hurled rocks at a municipal building, and smashed a cafeteria believed to have shared ownership with the nightclub.
Investigations have so far revealed that the club was operating at least double its 250-person capacity without proper licensing. Officials say the numerous safety violations included no emergency exits, insufficient fire equipment, the use of flammable cladding and no sprinkler system. Many victims were trampled as panicked concertgoers rushed toward a single exit.
Neighboring Serbia and Bulgaria, which immediately offered assistance following the tragedy, are observing a day of national mourning Tuesday in solidarity with North Macedonia.
Medical specialists from the Czech Republic, Serbia and Israel have arrived to support treatment efforts for the injured, Health Ministry officials said. The European Union is helping transport burn victims to nearby countries.
Around 50 patients are being treated in mostly neighboring and nearby countries, the majority of them with serious burns.
The disaster has intensified scrutiny of corruption in North Macedonia, which the EU has previously identified as a major obstacle to the country’s accession to the bloc. Authorities are investigating allegations that club owners bribed officials to bypass safety regulations.
The government has ordered nationwide inspections of all nightclubs and other entertainment venues.
In neighboring Greece, North Macedonia’s foreign affairs and health ministers visited a hospital where three burn victims, aged 19, 25 and 26, are being treated in intensive care.
Foreign Minister Timco Mucunski described the fire as “the most tragic moment in the history of my nation.”
Speaking to reporters in the northern Greek city of Thessaloniki, he added: “This is a moment that will most likely remain in our collective memory for our lifetimes. But what will also remain in our collective memory – and we must never forget – is the solidarity that we have received.”
Testorides reported from Skopje, North Macedonia. Associated Press writer Derek Gatopoulos in Athens, Greece contributed to this report.
Thousands gather in protest for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Florent Bajrami)
University students stand still as they mourn the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Boris Grdanoski)
University students light candles for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Boris Grdanoski)
University students light candles for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Boris Grdanoski)
Municipal workers use an empty coffin to measure the graves they are digging for the victims of a massive nightclub fire, in the town of Kocani, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Armin Durgut)
A worker digs graves for the victims of a massive nightclub fire in the town of Kocani, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Visar Kryeziu)
University students light candles for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Boris Grdanoski)
Workers dig graves for the victims of a massive nightclub fire in the town of Kocani, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Visar Kryeziu)
Priests perform a religious service during a vigil in the town of Kocani, North Macedonia, Tuesday, March 18, 2025 following a massive fire in a nightclub early Sunday. (AP Photo/Armin Durgut)
People attend a vigil in the town of Kocani, North Macedonia, Tuesday, March 18, 2025 following a massive fire in a nightclub early Sunday. (AP Photo/Armin Durgut)
A man lights candles during a vigil in the town of Kocani, North Macedonia, Tuesday, March 18, 2025 following a massive fire in a nightclub early Sunday. (AP Photo/Armin Durgut)
A girl lights candles during a vigil in the town of Kocani, North Macedonia, Tuesday, March 18, 2025 following a massive fire in a nightclub early Sunday. (AP Photo/Armin Durgut)
Protesters hold placards as thousands gather in protest for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Visar Kryeziu)
A priests reads prayers during a vigil in the town of Kocani, North Macedonia, Tuesday, March 18, 2025 following a massive fire in a nightclub early Sunday. (AP Photo/Armin Durgut)
Thousands gather in protest for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Visar Kryeziu)
People light their mobile phones during a protest for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Boris Grdanoski)
Protesters hold placards as thousands gather in protest for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Visar Kryeziu)
A protester holds her mobile phone as thousands gather for the victims of a massive nightclub fire in the town of Kocani, in Skopje, North Macedonia, Tuesday, March 18, 2025. (AP Photo/Boris Grdanoski)
A vehicle is overturned by people protesting near the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People argue with policemen, outside the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People push a car on its side while protesting near the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
A policeman runs behind people heading to the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
Residents gather in front of mayor's office during protest following a massive nightclub fire in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Boris Grdanoski)
Protesters hold placards during a protest following a massive nightclub fire in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Boris Grdanoski)
Protesters hold placards as they march during protest following a massive nightclub fire in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Boris Grdanoski)
People push a car on its side while protesting near the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People argue with policemen, outside the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People argue with policemen, outside the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People vandalize a vehicle outside the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People push a car on its side while protesting near the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Visar Kryeziu)
People argue with policemen, outside the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Armin Durgut)
People confront police near the home of the owner of a nightclub that was the scene of a massive fire, after a vigil for the victims in the town of Kocani, North Macedonia, Monday, March 17, 2025. (AP Photo/Visar Kryeziu)
