CA Forever 21 Stores To Close Down Amid Bankruptcy Filing

CALIFORNIA — Iconic California-born store Forever 21 has announced plans to close all of its stores across the U.S. unless it can find a buyer for some or all of its business, the company announced Sunday.

In California, at least 53 stores are open, according to the store directory.

The company filed for 11 bankruptcy protection late Sunday, announcing that it plans to "wind down" operations in its stores and on its website while executives decide the chain's future.

However, stores located outside of the U.S. will remain unaffected and stay open.

The mall staple has limped along financially after first filing for bankruptcy in 2019. But the company says competing "foreign fast fashion companies" have undercut the Forever 21 brand and may lead to its extinction.

"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, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends," said Chief Financial Officer Brad Sell.

Sell cited a tax loophole that is being used by brands like Temu and Shein, under which the retailers ship clothing and accessories straight to U.S. shoppers so that they do not have to pay import fees.

After its first foray into bankruptcy, Forever 21 was purchased from its original owners — a family of Korean immigrants — in 2020 by Authentic Brands Group.

As the brand continued to struggle in 2023, the company partnered with Shein. Authentic CEO Jamie Salter would later tell Retail Dive that purchasing Forever 21 was the biggest mistake he ever made.

“I didn’t see Shein and I didn’t see Temu,” Salter told Retail Dive. “My partner, Mr. Simon said, ‘Why are you going partners with Shein? Like, you think that’s the right decision?’ I said, ‘David, it’s the right decision. We cannot beat them. Their supply chain is too good. They know what’s going on. They’ve figured this out. We need to partner with them.’”

Long before Shein and Temu existed, Forever 21 exploded in popularity in the 2000s when its original owners began selling runway fashion at ultra-cheap prices.

The store first opened as Fashion 21 in 1984 in the Highland Park neighborhood of Los Angeles.