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Forever 21 is set to permanently close all of its U.S. stores as the fast-fashion retailer pursues bankruptcy for a second time.

In a March 16 filing in U.S. Bankruptcy Court for the District of Delaware, the Los Angeles-headquartered chain said competition from foreign-based online sellers, rising costs and shifting consumer trends were to blame.

The company plans to hold liquidation sales at its roughly 350 U.S. stores while conducting a court-supervised sale process for at least some of its assets. In the event of a successful sale, Forever 21 said it may “pivot away” from a full wind-down of operations to allow a deal to take place that would see it continue as a going concern.

During the wind-down process, the chain’s stores and website will remain open. Forever 21’s 200 locations outside of the U.S. are operated by other licensees and aren’t included in the filing.

Within New Jersey, Forever 21 has the following outposts:

• Atlantic City Tanger Outlets
• Bridgewater Bridgewater Commons
• Cherry Hill Cherry Hill Mall
• Deptford Deptford Mall
• Edison Menlo Park Mall
• Elizabeth The Mills at Jersey Gardens
• Freehold Freehold Raceway Mall
• Jersey City Newport Centre
• Mays Landing Hamilton Mall
• Paramus Westfield Garden State Plaza
• Rockaway Township Rockaway Townsquare 
• Toms River Ocean County Mall
• Wayne Willowbrook Mall
• Lawrenceville Quaker Bridge Mall
• Woodbridge Woodbridge Center

Earlier this month, reports surfaced that Forever 21 was preparing to shutter 200 stores nationwide as it mulled a second bankruptcy filing. 

No ‘sustainable path forward’

Founded in 1984, Forever 21 was popular among teen shoppers seeking stylish but affordable clothing. Of the 800 stores the company had at its peak a decade ago, approximately 500 were in the U.S.

After filing for bankruptcy in September 2019, the chain closed about 180 locations as part of an effort to restructure. By February 2020, it was acquired for $81 million. That joint venture buyer comprised Authentic Brands Group, mall owner Simon Property Group and real estate company Brookfield Property Partners.

Forever 21 has continued to struggle in recent years against growing online competition, particularly from Chinese budget retailers like Temu and Shein.

In a statement, Brad Sell, chief financial officer of F21 OpCo, operator of Forever 21 stores and licensee of the brand in the U.S., said, “While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin, as well as rising costs, economic challenges impacting our core customers and evolving consumer trends.”

He said, “As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”

In its Chapter 11 petition, Forever 21 listed assets ranging from $100 million to $500 million and liabilities between $1 billion and $5 billion.