- Forever 21 is now navigating its second bankruptcy in five years.
- The brand was known for limited-run collections that turned the typical apparel cycle on its head.
- It also laid the groundwork for brands like Temu and Shein, which won over much of its business.
Forever 21, the once iconic fast fashion mainstay of shopping malls, is now navigating its second bankruptcy in five years, as rising costs and new competition have led to several years of financial losses.
For decades, the brand was a popular choice for budget-minded shoppers, offering limited-run collections that turned the typical apparel cycle on its head.
Forever 21 was once one of the fastest-growing fashion retailers in the world, laying the groundwork for brands like Temu and Shein, which the company later cited as threats to its existence.
Here's a look back at the rise and fall of Forever 21.
The company was founded in 1984 by married couple Jin Sook and Do Won "Don" Chang in Los Angeles.
The couple arrived three years earlier from South Korea with basically no money, no degrees, and nearly no English.
Jin Sook worked as a hairdresser while Don worked as a janitor, pumped gas, and served coffee.
Don said he noticed that the nicest cars were driven by people in the garment business.
Originally called Fashion 21, the Changs' first location in 1984 was a 900-square-foot clothing store they opened with $11,000 in savings.
The store made $700,000 in sales in its first year.
Soon the Changs were opening a new location every six months.
They also rebranded as Forever 21, saying that he store was "for anyone who wants to be trendy, fresh and young in spirit."
The company pioneered the concept of "fast fashion" to stay on-trend.
Jin Sook eventually approved more than 400 designs a day, some of which got the company into trouble with other brands.
By 2015, Forever 21 had 480 US stores and $4.4 billion in global sales.
The Changs became one of America's wealthiest couples, with a combined net worth reaching an estimated $5.9 billion in March 2015.
A goal of 600 worldwide stores and $8 billion in sales by 2017 proved too lofty.
As the company focused on growth, some of its styles became more predictable, while competitors like H&M and Zara gained market share. An executive later said that opening stores in 47 countries in less than six years introduced a lot of "complexity" to the business.
Competition from e-commerce brands also started to eat away at sales.
Brands like Fashion Nova began churning out styles, not to mention the rising influence of Amazon.
Some designs and partnerships didn't exactly help the brand stay relevant with young shoppers, either.
Some social media users have mocked some of its recent designs over the last 6 years, including some from Cheetos, Top Ramen, and the United States Postal Service, as driving Forever 21's financial troubles.
Burdened by $500 million in debt, the company filed for bankruptcy for the first time in 2019.
"Filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future," the company said at the time.
In 2020 — just before the pandemic — Forever 21 reached a deal.
A strategic partnership between Authentic Brands Group and two shopping center owners, Simon and Brookfield, was intended to revitalize the mall-rat-favorite brand.
Brookfield later sold its stake.
The pandemic brought a litany of new headaches — namely inflation and supply chain challenges.
Although the company enjoyed a period of success following the bankruptcy sale, it later said things have deteriorated since 2021.
New competitors, like Shein and Temu, also turbocharged the fast fashion game.
Under a trade rule known as the "de minimis" exemption, e-commerce retailers can ship packages worth less than $800 to the US from overseas without paying a tariff, passing some of the savings along in the form of lower prices.
In March, Forever 21 once again filed for bankruptcy.
The company blamed the "de minimis" rule for partly undercutting its ability to compete on price with "non-US online retailers."
The financial hole has gotten steep, with more than $550 million in losses over the past four years, per the company's filings.
The company now plans to close several underperforming stores as it looks for a buyer to keep the brand alive, albeit likely at a fraction of its peak scale and cultural influence.
Forever 21's future is far from certain, but one possibility is that it could live on as an e-commerce brand.
"This would make Forever 21 a shadow of its former self, but a sale is possible as e-commerce and brand groups may show some interest," GlobalData retail analyst Neil Saunders said in a note.
Other former titans of 20th Century retail, like Bed Bath & Beyond, have previously shed their prior physical presence for an online-only brand that capitalizes on the loyalty and recognition of the original.
