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- At its peak, Forever 21 operated more than 800 stores worldwide and earned billions in revenue.
- Now, the U.S. operator of the once popular chain plans to close roughly 200 stores as well as its downtown Los Angeles headquarters.
- Industry analysts cited several reasons behind Forever 21’s struggles, including expanding too rapidly, failing to keep up with rapid changes in fast-fashion trends and rising competition from online retailers.
Do Won Chang was 30 years old in 1984 when he and his wife, Jin Sook Chang, opened a shop in the Los Angeles neighborhood of Highland Park and called it Fashion 21.
The husband-and-wife team, who emigrated from South Korea three years earlier, sold clothes and apparel to teens and young adults at nearly unbeatable prices. The 900-square-foot shop brought in $700,000 in revenue in the first year and would turn into the fashion scene staple known as Forever 21.
At its peak, Forever 21 operated more than 800 stores worldwide and earned billions in revenue. The brand appealed especially to young women and helped usher in the era of fast fashion in the U.S., which refers to the rapid, mass production of cheap clothing.
The company’s time in the limelight, however, is coming to an end. The U.S. operator of Forever 21 plans to close roughly 200 stores as well as its downtown Los Angeles headquarters. The moves reportedly are part of an upcoming bankruptcy filing, the second in six years.
Nearly 360 employees working at the headquarters will be laid off beginning in April, including the chief financial officer, according to a regulatory filing with the California Employment Development Department.
Representatives of Forever 21 did not respond to requests for comment.
“Forever 21’s operating company, which is the brand licensee in the U.S., continues to explore strategic options, including a potential sale, while also reducing costs and optimizing its store footprint,” a representative for Forever 21’s operations owner Catalyst Brands said in a statement to Bloomberg. “The efforts are ongoing and no final decisions regarding the outcome of the process have been made.”
Forever 21, once a popular seller of inexpensive clothes and apparel, appears poised to file for its second bankruptcy in six years.
Forever 21’s fall to near irrelevance from retail pioneer was driven by several missteps, including expanding too rapidly, failing to keep up with rapid changes in fast-fashion trends and rising competition from cheap online retailers, industry experts said.
“The original owners were really good at what they did and so they were ramping up at warp speed,” said Nicole Craig, a professor at the Arizona State University Fashion Institute of Design and Merchandising and former Forever 21 corporate employee. “They were very successful for a long time, but sometimes it can be hard to take a teen brand and make it bigger.”
Craig worked as a senior buyer for Forever 21 and later worked with it as a private supplier until 2019, when the company first filed for bankruptcy.
As part of the bankruptcy process, the company’s intellectual property was jointly acquired by Authentic Brands Group and mall operators Simon Property Group and Brookfield Property Partners. Forever 21 has been one of Simon and Brookfield’s largest tenants.
To stem losses, Forever 21 may pursue another bankruptcy filing that would involve the sale of assets or the liquidation of remaining stores, Bloomberg reported.
Forever 21 currently has 58 locations in California, including several in Los Angeles County.
The store at Santa Monica Place was mostly empty Friday afternoon, with a few customers taking advantage of closing sales of up to 40% off.
Nearly a decade ago, before Instagram influencers existed, Forever 21 helped teen girls dress like their favorite celebrities, for cheap.
A growth spree in shopping malls
From its humble beginnings in Highland Park, Forever 21 expanded rapidly in the U.S. and abroad, with the company’s revenue peaking at $4.4 billion in 2015.
As large, now-defunct department stores such as Mervyns went out of business in the early 2000s, Forever 21 moved aggressively into those spaces.
“There were a lot of huge retail spaces that suddenly became available,” Craig said. “In hindsight, it probably wasn’t a great move. The reality is we didn’t have enough business.”
During its heyday in the 2010s, Forever 21’s chief competitors were Swedish fashion retailer H&M and Zara, which is owned by the Spanish multinational retailer Inditex. Although Forever 21 had carved out a niche in the market for teenage girls, its specificity soon became limiting as it failed to attract older customers.
“The difference is that Forever 21 was really seen as a teen brand, whereas H&M and Zara were not,” Craig said. “It can be very hard to change public perception.”
Rising competition from online retailers
Forever 21 faces heavy competition from online-only retailers including Temu and other up-and-coming brands such as Edikted, which offer more products at a lower price point. In 2023, Forever 21 announced a partnership with Singapore-based fast-fashion retailer Shein in which it would carry Shein products in its stores, joining forces with a primary competitor.
Fashion Nova, another Los Angeles-based fast-fashion retailer that operates mostly online, also has cut into Forever 21’s customer base.
Our discarded clothing continues to clog waterways, char the skies with toxic smoke and ruin places where other people live, including Chile and Ghana.
“The problem was, Shein and Temu became the fundamental leaders of fast fashion,” said Ilse Metchek, former president of the California Fashion Assn. “There was no way that the prices in Forever 21, given that they have to pay rent, would match the prices that were online.”
Additionally, Metcheck said, Forever 21 didn’t invest enough in advertising and online merchandising. It also failed to build relationships with influencers who could attract young shoppers on social media.
“Today’s teenagers have moved on,” she said of Forever 21. “It will be part of the story of the industry of fast fashion. They will leave a legacy of the way they began from nowhere into the giant that they once were.”
Some chains have rebounded by creating a new name to appeal to a new customer base. The owners of the retail chain Urban Outfitters, which mostly markets to young adults, opened Anthropologie in 1992 to provide a place where young shoppers could graduate to, Craig said.
Similarly, Victoria Secret created the Pink brand to serve younger customers without sacrificing the mature reputation of the original brand. Abercrombie & Fitch also came back from the brink.
The recent growth in experiential retail combines the changing attitudes of shoppers with landlords’ need to fill space. Malls have been struggling for decades as department stores consolidated and fell out of favor.
For Forever 21 to carry on, it probably would have to change its name and image, industry analysts said.
“Forever 21 was the brand that the former generation used,” said Roger Beahm, a marketing professor and director of the Retail Learning Labs at Wake Forest University. “Today’s shoppers want their own brand, they want their own identity.”
The popularity of fast fashion — widely considered unsustainable and detrimental to the environment — also has fallen drastically, taking a hit on the public perception of Forever 21. Other major brands have started sustainability initiatives to combat its bad reputation.
“H&M and Zara are still seen as fast fashion, but they have been able to escape some of the daggers that have hit Forever 21,” Craig said. “Fast fashion is just not what most customers are looking for right now.”
Shoppers in 2025 also have a different relationship with brick-and-mortar stores and shopping malls, Beahm said. Before the pandemic, malls were a place for teens to socialize, dine and shop. Now, with all generations accustomed to shopping online, malls are not as popular of a destination, he said.
“Even where the stores are located has been a handicap for them in terms of broadening their appeal,” Beahm said.
Forever 21 has made other attempts to widen its customer base by offering men’s and children’s options in addition to apparel for young women. But in doing so, they diluted the original focus of their brand, Beahm said.
“The war is won and lost in the mind of the consumer,” he said. “Forever 21 is no longer able to reach the heart and the mind of their original prospect. In my opinion, getting back there from where they are now is next to impossible.”
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