Forever 21 plans U.S. store closures, files for bankruptcy

Forever 21 has filed for Chapter 11 bankruptcy for the second time in six years, citing intense competition from fast-fashion retailers like Shein and Temu, as well as rising operational costs and changing consumer preferences. The retailer plans to close all its U.S. stores while conducting liquidation sales, though it remains open to finding a buyer for its assets. CFO Brad Sell emphasized the challenges posed by foreign competitors taking advantage of a trade law loophole that allows certain goods to enter the U.S. duty-free, undermining Forever 21's pricing. The company, which operates about 350 stores in the U.S., is also reacting to economic pressures affecting its customer base. Analysts suggest that the brand has struggled to maintain relevance and a clear identity in the fast-fashion market. As it winds down operations, Forever 21 will continue to serve customers through its website and remaining stores in the interim.