Forever 21 filed for Chapter 11 bankruptcy protection for the second time in six years in March 2025, citing intense competition from international fast fashion brands like Shein and Temu, rising operational costs, economic challenges, and shifting consumer preferences as key factors in its decline
. The company blamed Shein and Temu's use of the de minimis exemption-a trade loophole allowing goods valued under $800 to enter the U.S. duty-free-which gave these competitors a significant pricing advantage
. Following the bankruptcy filing, Forever 21 initiated liquidation sales and announced the permanent closure of all 354 of its U.S. stores by May 1, 2025, effectively ending its physical retail presence in the United States
. The company also closed its corporate headquarters in Los Angeles and laid off hundreds of employees earlier in 2025 as part of restructuring efforts
. Despite these closures, Forever 21's international operations and its intellectual property, owned by Authentic Brands Group, remain intact
. The downfall of Forever 21 is attributed to several factors including rapid overexpansion, failure to keep pace with fast-changing fashion trends, and the rise of cheap online competitors
. The brand, once a pioneer in fast fashion and a staple for young shoppers, struggled to maintain relevance in a highly competitive and evolving retail landscape
. In summary, Forever 21's U.S. operations have ceased due to bankruptcy and competitive pressures, but the brand continues to exist internationally and as an intellectual property entity
