A once-popular fast-fashion retailer, Forever 21 has filed for Chapter 11 bankruptcy for the second time in six years, signaling a potential liquidation of its US operations. Known for its trendy, affordable clothing, the company struggled to adapt to the changing retail landscape.  

The bankruptcy filing indicates that Forever 21 was unable to secure a buyer for its approximately 350 US stores. However, owned by the Authentic Brands Group, the brand’s trademark and intellectual property may continue to operate in a different form. The brand's decline reflects the challenges faced by brick-and-mortar retailers in the age of e-commerce and the decline of traditional shopping malls.

Founded in 1984, Forever 21 reached its peak in 2016, operating around 800 stores globally, with 500 in the US.

However, the rise of online shopping and shifting consumer preferences contributed to its downfall. The company previously filed for Chapter 11 in 2019 and was acquired by Sparc, a joint venture between Authentic Brands Group and mall operators Simon Property and Brookfield Asset Management Inc.  

Currently, Forever 21 plans to conduct liquidation sales at its US stores while seeking a court-supervised sale of its assets. The company's estimated assets range from $100 million to $500 million, while its liabilities are between $1 billion and $10 billion.  

Forever 21 is currently owned by Catalyst Brands, a company formed by merging Sparc Group and JC Penney. Despite the bankruptcy, the brand’s US stores and the website will remain open for now, and its international stores will remain unaffected. Authentic Brands Group will retain ownership of Forever 21’s intellectual property, leaving the possibility of the brand continuing in some capacity.