Forever 21 Files for Bankruptcy, Expected to Close all U.S. Stores

Founded in 1984 by Korean immigrants in California, Forever 21 grew to $1 billion in annual sales by 2005. The store quickly became a mall staple for millennials looking for designer-inspired styles, alongside fellow low-cost retailer H&M and the pricier Abercrombie & Fitch. Forever 21’s sales peaked at more than $4 billion a decade later, and founders Jin Sook and Do Won “Don” Chang were estimated to hold a combined net worth of $5.9 billion.

Yet as the 2010s wore on, the brand began to be eclipsed by online rivals, including ultra-cheap fast-fashion retailers like Shein that shipped their garments to U.S. customers from overseas. In this environment, Forever 21’s reliance on foot traffic at malls began to prove a liability as customers increasingly leaned into e-commerce.

Forever 21 filed for bankruptcy for the first time in 2019, hoping to become a more efficient operation. But the Covid-19 pandemic only accelerated the company’s woes, even as it was bought out of bankruptcy by Authentic Brands, the operator of other major retailers and two major mall operators.

In a 2024 interview, the CEO of Authentic called the purchase of Forever 21 “probably the biggest mistake I made.”

Ultimately, today’s youth demographic simply moved on from the Forever 21 brand, experts said.

“Forever 21 was the brand that the former generation used,” said Roger Beahm, a marketing professor and director of the Retail Learning Labs at Wake Forest University, told the Los Angeles Times. “Today’s shoppers want their own brand, they want their own identity.”