American Fashion Retailer Forever 21 Again Applies For Bankruptcy Protection

On March 16 local time, American fashion retailer Forever 21 applied for bankruptcy protection in Delaware in accordance with Chapter 11 of the United States Bankruptcy Law. According to court documents, the estimated liabilities of the company are in the range of 1 billion to 10 billion dollars, while the assets are valued at 100 million to 500 million dollars. It is worth noting that this is the second time that the brand has applied for bankruptcy protection in 6 years.

Forever 21 was founded by Korean American Zhang Dongwen and his wife in 1984. With a fast pace of innovation and affordable prices, once entering the US market, it expanded rapidly. Different from fast fashion brands such as ZARA and H&M, Forever 21 focuses on sweet style, bright colors, avant-garde design, full of youthful spirit, and is especially loved by young women in their 20s. During the period of brand development, Forever 21 has more than 800 stores in nearly 50 countries around the world, with annual sales up to 4.1 billion dollars.

However, in 2019, Forever 21 applied for bankruptcy protection due to operating difficulties to restructure its business. By February 2020, a consortium composed of Simon Real Estate Group, Brookfield Real Estate Company and Authentic Brands Group (ABG), a brand management company, acquired Forever 21 at a low price of $81 million, giving the brand a chance to start afresh.

However, the road of revival of Forever 21 is not smooth. In February 2025, news came out that Catalyst Brands, the operator of Forever 21, was facing a severe business crisis. In order to alleviate the difficulties, Catalyst Brands plans to close at least 200 stores and actively seek buyers to purchase the remaining stores. If the buyer is not found successfully, about 350 stores are expected to face liquidation. At that time, it was said that Forever 21 was in financial crisis due to poor management and was preparing a potential bankruptcy plan, which could start the closing procedure as soon as March.

Now, just one month later, Forever 21 officially announced its application for bankruptcy protection. According to media reports, this bankruptcy application is only for American operating companies, whose intellectual property rights will not be affected, nor will it affect international authorized stores. Forever 21 should continue to pay attention to how to deal with the dilemma and how the fashion retail industry will change as a result.