(TheRedAlertNews.com) – In a surprising development, Forever 21 is closing all its U.S. stores amidst bankruptcy for the second time in six years, a glaring example of how unchecked foreign competition is crippling American businesses.
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Overwhelming competition from low-cost foreign retailers like Shein and Temu, using unfair trade practices, has played a crucial role in this unfortunate turn of events.
Even after previous efforts to save the iconic brand, it’s clear that excessive foreign competition must be addressed to protect American businesses and jobs.
Forever 21 filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
It’s a familiar battle for the retailer, which has struggled to keep up with cheaper imports that flood the American market.
The company blamed fast fashion competitors for leveraging the de minimis exemption, allowing them to sell goods tariff-free if valued under $800, severely impacting domestic retailers.
Huge debts exceeding $1.58 billion also pushed them to take such drastic action.
The closure of all U.S. stores marks the end of an era for the once-beloved retailer that serviced teenagers’ fashion needs for decades.
Store closures have already begun in several states, and a shutdown of its Los Angeles headquarters will result in 358 employees losing their jobs.
Forever 21 is now seeking a potential buyer for its remaining assets and aiming for a graceful exit.
Despite operating 350 U.S. stores and 540 locations worldwide, the company’s efforts with international partners like Shein yielded underwhelming results.
Authentic Brands Group, which purchased Forever 21 in February 2020 for $81 million, has expressed regret as competitor tactics and relentless economic challenges have stymied further growth.
But despite shuttering U.S. stores, Authentic Brands aims to modernize Forever 21 for international markets.
“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,” Brad Sell, chief financial officer of F21 OpCo, said in a news release.
Authentic Brands is eager to keep Forever 21’s intellectual property intact while exploring strategic paths for the brand’s digital and overseas expansion.
With American retail changing swiftly, they aim to create a new distribution model worthy of global fast fashion markets.
Forever 21 files for bankruptcy, expected to close all U.S. stores https://t.co/2cBS3YVmyL
— philip lewis (@Phil_Lewis_) March 17, 2025
Still, doubts linger about whether a ‘white knight’ investor will come forward, as experts suggest these struggles might be “the final nail in the coffin.”
Forever 21’s fall reflects deeper issues within the retail sector and illustrates the need for balanced trade to protect domestic industries.
Experts predict that more store closures are on the horizon, with nearly double the usual numbers expected this year.
American retailers are squeezed by foreign imports that are sold cheap, threatening job stability and economic growth.
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