Fast-fashion retailer Forever 21 files for bankruptcy as financial liabilities loom

Fast-fashion retailer Forever 21 filed for bankruptcy under Chapter 11 in Delaware, United States, after financial liabilities rose for the company, reported the news agency Bloomberg on Monday, March 17. 

Forever 21 is a well-known brand worldwide that attracts young women and girls to shop for trendy and fashionable clothing for a decent price. The prices are lower than other global brands, but Indian fashion brands like Tata-owned Zudio still command the market share.

According to the agency report, Forever 21 filed for bankruptcy and listed its total assets and liabilities. The company has a total liability of $1 to $10 billion, while assets are only in the range of $100 to $500 million, as per the filings.

As per an earlier report, the brand was considering other options to turn around its business operations in February 2025, including declaring a second-time bankruptcy.

First Bankruptcy

According to the agency report, the Fast-fashion brand Forever 21 filed its first bankruptcy in 2019, which did not leave many options for the creditors of the firm other than to collect little recovery of the amount due.

This move costed the brand, which closed down hundreds of stores around the world and currently, the company has more than 540 store locations around the world, as per the official data cited by the news agency.

Simon Property Group, Brookfield Corp., and Authentic Brands were the buyers who stepped in to revive the fashion brand after its first bankruptcy through a joint venture called Sparc Group.

The firm also announced in 2025 that they were in the process of collaborating with the American departmental store, JCPenney, to form “Catalyst Brands”.

During the merger, the newly formed entity Catalyst Brands said that they would explore strategic options for the operations of the Forever 21 business. Forever 21 is one of the latest fashion brands that took a hit due to high inflation in the US economy, and customers reduced their shopping budgets and shifted to online purchases compared to store buys, reported the news agency.