Forever 21 Is Closing More Stores as Reports of Bankruptcy Bubble Up

Mar. 15, 2025

Forever 21 storefront in Maryland in 2022.Photo:Eric Lee/Bloomberg via Getty

Eric Lee/Bloomberg via Getty

It’s the end of an era for Forever 21.

A source tells PEOPLE that if a Chapter 11 restructuring is filed it would only affect “Forever 21’s U.S. operating company, which manages the brand’s stores and day-to-day retail operations in the U.S.” They added that the goal of filing “would be realigning operations” in order to better position the company for “long-term success.”

Local outlets inNew York,California,Pennsylvania,ConnecticutandWashingtonhave confirmed multiple stores in their states are set to be closed. While an exact number of closures has yet to be confirmed, local New York outletSyracuse.comreported that at least 200 stores may be affected.

Additionally, Worker Adjustment and Retraining Notification (WARN) notices have been filed in California and Pennsylvania indicating mass layoffs will be affecting employees in those areas, multiple outlets, includingUSA Today, confirm. Those layoffs are set to include at least 350 workers at the company’s headquarters in Los Angeles, which is also reportedly slated to be closed.

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“This decision was not made lightly,” a Forever 21 spokesperson said in a statement toUSA Todayin February. “And we remain committed to transparency and fair treatment of our employees during this period of transition.”

PEOPLE reached out to representatives for Forever 21 and Authentic Brand Groups for comment on the bankruptcy reports.

Forever 21 logo.Kentaro Takahashi/Bloomberg via Getty

Kentaro Takahashi/Bloomberg via Getty

Sources tell PEOPLE the brand will not be disappearing. Instead, it is anticipated to be moving toward a more online-centric model to better compete with fast-fashion juggernauts like Shein and Temu, eliminating many of its storefronts in the process.

Forever 21 was a staple in malls across the country throughout the ’90s and early ’00s, making it a popular shop for teens. However, the company has struggled to compete in an era where shopping is increasingly done online, especially among younger consumers.

PEOPLE’s source says the company’s proposed new approach will “enable the brand to respond faster to trends and deliver curated monthly collections based on consumer insights” — and potentially reconnect with its target customers in the process.

source: people.com