By John Q. Hosedrinker 
Forever 21, a pioneer of fast fashion, has filed for bankruptcy and will close its remaining US stores. The company cites intense competition from foreign fast-fashion retailers, leveraging pricing advantages, as a major factor in its demise. Rising costs, economic headwinds, and shifting consumer trends also contributed to the decision. While US stores will close, international locations and the company’s website will remain operational.
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Forever 21, the once ubiquitous fast-fashion retailer, is filing for bankruptcy again and plans to close all its US stores. This isn’t just another business failure; it’s a stark illustration of the challenges facing brick-and-mortar stores in the age of online competition and shifting consumer preferences. The company, now owned by Authentic Brands, a firm known for acquiring struggling brands, will likely see its physical presence vanish, leaving behind only the brand name to be exploited through licensing deals. This business strategy, repeatedly employed by Authentic Brands with other acquisitions like Sports Illustrated, involves acquiring the brand rights and then licensing them out to other retailers, essentially eliminating the original retail operation. This same playbook is being used with JCPenney, where Authentic Brands forces the retailer to stock its licensed merchandise. This approach highlights the ruthless efficiency of their strategy, turning brand recognition into a profitable, albeit somewhat cynical, business model.
The decline of Forever 21 has been a gradual process. The company’s reliance on importing clothing made it particularly vulnerable to the Trump-era tariffs, significantly impacting its profitability. Simultaneously, the in-store experience has consistently fallen short of customer expectations. Reports consistently describe messy stores, understaffed locations, and inconsistent inventory across different locations. The overall atmosphere of the stores reflects the declining quality of their merchandise. This is not a surprise considering the brand’s reputation of being unorganized, having shoddy lighting, and not making updates to its stores. The brand is so unappealing that one can even say it looks like it’s from the “Backrooms”.
Furthermore, the rise of online fast-fashion giants like Shein and Temu has dealt a near-fatal blow to Forever 21’s business model. These online competitors offer similar, if not identical, clothing styles at significantly lower prices. Forever 21 has failed to adapt to this new competitive landscape, continuing to charge prices that reflect its past, when the quality was better and the competition less fierce. For instance, a jacket listed at $60 on Forever 21’s website can be found for $20 on Shein; there’s simply no justifiable reason for the price difference given the comparative quality. Consumers have voted with their wallets, choosing the far more affordable alternatives.
The shift away from fast fashion trends is another contributing factor to Forever 21’s downfall. While the company continues to chase trends, many consumers are showing decreased interest in fast fashion itself. The unsustainable environmental and ethical implications of fast fashion are increasingly influencing purchasing decisions. Consumers prioritize quality and longevity over cheap, trendy pieces.
This bankruptcy filing underscores a larger trend in the retail industry. The convenience of online shopping, coupled with the often lower prices offered by online retailers, who leverage overseas manufacturing to avoid certain taxes and tariffs, has proven an insurmountable hurdle for many brick-and-mortar stores. The added overhead costs associated with physical stores, including rent, staffing, and import taxes, make it difficult for traditional retailers to compete against their online counterparts. This is especially true in the fast-fashion segment, where margins are notoriously thin and consumers are highly price-sensitive.
The closure of Forever 21’s US stores signals a significant shift in the retail landscape and leaves many questions unanswered regarding the future of retail spaces themselves. These large, multi-story spaces in malls will require innovative solutions to fill the void. However, it remains unlikely that another retailer will take their spot, given the continued shift toward online shopping. The closure is a painful but possibly necessary step in a larger economic cleansing, removing struggling businesses to make room for more resilient enterprises. While painful for employees, the collapse of these “zombie companies” might ultimately prove beneficial to the overall health of the economy. The legacy of Forever 21, however, remains cemented in the annals of fast-fashion history, a cautionary tale of a brand that failed to adapt to a rapidly evolving market.