In yet another example of corporate mismanagement and the changing face of American retail, the U.S. operator of Forever 21 is preparing to shutter at least 200 more stores, according to a Bloomberg report. The potential bankruptcy process could begin as early as next month—a grim indicator of how liberal economic policies, rising inflation, and out-of-control spending have taken their toll on American businesses.
Once a go-to destination for affordable fashion, Forever 21 has struggled for years to keep up with shifting consumer habits and growing competition, especially from online retailers like Shein. Despite efforts to stay afloat, the retailer now faces the harsh reality of possibly liquidating its entire chain of approximately 350 stores if no suitable buyer steps in.
Some of the stores slated for closure have been financial sinkholes for years. Bloomberg reports that Forever 21’s operating company, F21 OpCo, has been scrambling to keep certain locations open by withholding royalties and rent payments. While this tactic may have delayed the inevitable, it clearly wasn’t enough to prevent the looming bankruptcy.
The Forever 21 brand itself is owned by Authentic Brands Group, which licenses it to the operating company now heading toward a Chapter 11 filing. Even if the operating company collapses, Authentic Brands plans to hold onto the Forever 21 trademark and license it to other retailers—meaning the brand might survive, even if the stores don’t.
F21 OpCo operates under Catalyst Brands, a retail umbrella that also oversees familiar names like JCPenney, Aéropostale, Eddie Bauer, Lucky Brand, and Nautica. Catalyst Brands’ shareholders include heavyweights like Simon Property Group, Brookfield Corp., Authentic Brands Group, and—unsurprisingly—Shein, the Chinese-owned fast-fashion giant that’s been undercutting American retailers for years with cheap imports and questionable business practices.
It’s hard to ignore the broader economic context behind Forever 21’s downfall. With record inflation and sky-high interest rates crushing both consumers and businesses, many brick-and-mortar retailers are struggling. Families are tightening their budgets, focusing on necessities instead of fashion splurges. Meanwhile, rising labor costs, aggressive regulations, and global supply chain disruptions—many of which were exacerbated by reckless government spending—have added fuel to the fire.
Critics might point to Forever 21’s failure to adapt to online shopping trends, but there’s more to the story. American retailers are playing on an uneven playing field. Companies like Shein flood the market with dirt-cheap products, often produced in countries with far lower labor and environmental standards. At the same time, U.S. businesses are saddled with endless red tape and punitive tax policies that stifle growth and innovation.
If no buyer emerges for Forever 21’s remaining stores, liquidation could devastate local malls and shopping centers already struggling with declining foot traffic. For many communities, these closures would mean more vacant storefronts, lost jobs, and a further blow to local economies.
Despite the chaos, Authentic Brands seems determined to keep the Forever 21 label alive through licensing deals. Whether that’s enough to save the retailer’s legacy remains to be seen. What’s clear is that Forever 21’s troubles reflect a broader trend: American businesses are being squeezed from all sides, and unless there’s a serious shift in economic policies, more closures and bankruptcies are likely on the horizon.
Forever 21, Catalyst Brands, and Authentic Brands have yet to comment on the potential bankruptcy—but the writing is on the wall. Without meaningful changes to how we support American businesses, the future of brick-and-mortar retail looks increasingly bleak.
