Forever 21 has filed for bankruptcy protection for a second time and plans to close down its U.S. business as traffic in U.S. shopping malls fades and competition from online retailers like Amazon, Temu and Shein intensifies.
F21 OpCo, which runs Forever 21 stores, said late Sunday that it will wind down the business in the U.S. under Chapter 11 bankruptcy protection while determining if it can continue as a business with a partner, or if it will sell some or all of its assets.
“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,” Chief Financial Officer Brad Sell said in a statement.
The de minimis tax exemption lets shipments headed to U.S. businesses and consumers valued at less than $800 to enter the country tax free and duty free.
Forever 21 stores in the U.S. will hold liquidation sales and the website will continue to run while operations wind down. The retailer's locations outside of the U.S. are run by other licensees and are not included in the bankruptcy filing. International store locations and websites will continue operating as normal.
Authentic Brands Group owns the international intellectual property associated with the Forever 21 brand and may license the brand to other operators, F21OpCo said.
Jarrod Weber, Global President, Lifestyle at Authentic Brands Group, said the restructuring lets Forever 21 “accelerate the modernization of the brand’s distribution model, setting it up to compete and lead in fast fashion for decades to come. We’re building a direct creation-to-shelf model that moves faster.”
He added that, “We are receiving lots of interest from strong brand operators and digital experts who share our vision and are ready to take the brand to the next level.”
Forever 21 first filed for bankruptcy protection in 2019. The following year, it was acquired by a consortium of parties including Authentic Brands Group and mall owners Simon Property Group and Brookfield Property Partners. In early January, Forever 21’s parent company, Sparc Group, merged with JCPenney to form Catalyst Brands, a new entity that also includes brands like Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica.
In 2023, Forever 21 teamed up with Chinese e-commerce player Shein. The partnership allowed Shein to carry Forever 21’s items on its platform. It also offered the opportunity to return Shein online orders at a couple hundred physical Forever 21 stores across the U.S.
Forever 21 joins a slew of other retailers that have filed for Chapter 11 or are liquidating in recent months as retailers face a slowdown in consumer spending and are navigating rising operating costs amid inflationary pressures. They include fabric and crafts retailer Joann Inc and Party City. In February, Outdoor apparel seller Liberated Brands, which has operated stores for surfer and skater-inspired labels like Quiksilver, Billabong and Volcom, filed for bankruptcy — and said it plans to shutter its locations across the U.S.
From Jan. 1 through March 14, U.S. retailers have so far announced 3,735 store closures, according to Coresight Research's weekly tracker.
Forever 21 had been battling a host of macroeconomic challenges as well as its own issues.
Forever 21 was founded in 1984 and, along with other fast-fashion chains like H&M and Zara, rode a wave of popularity among young customers in the mid-1990s. Their popularity grew during the Great Recession, when shoppers were seeking bargains. But Forever 21 went on an aggressive expansion just as shoppers were moving more online. Critics have said that Forever 21 was too slow to embraice online shopping.
The company also faced stiff competition from the likes of Shein and Temu, which churn out trendy items that are cheaper than what Forever 21 offers. For example, Forever 21 sells T-shirts for around $10. Temu has them for $5.
Neil Saunders, managing director of GlobalData, said in a statement that part of the problem now is that Forever 21's stores are too big for its current needs and it's in malls with not enough foot traffic.
“Forever 21 was always a retailer living on borrowed time. Over recent years it has been hit with dual headwinds from a weak apparel market and stiff competition from cheap Chinese marketplaces,” he said. “Both things have eroded its standing and depleted its market share.”
FILE - Shoppers walk by a Forever 21 clothing store, Thursday, Oct. 24, 2019, in Tokyo, as the liquidation sale signs are posted on the storefront. (AP Photo/Kiichiro Sato, file)
NEW YORK (AP) — President Donald Trump a week ago told the credit card industry it had until Jan. 20 to comply with his demand for a 10% cap on interest rates. With just days to go, consumer groups, politicians, and bankers alike remain unclear on what the White House has planned and whether Trump even remains serious about the idea.
So far, the White House has not provided any detail about what will happen to credit card companies that don’t lower card rates. White House Press Secretary Karoline Leavitt said the president has “an expectation” that credit card companies will accede to his demand that they cap interest rates on credit cards at 10%.
“I don’t have a specific consequence to outline for you but certainly this is an expectation and frankly a demand that the president has made,” she said Friday.
A researcher who studied Trump’s proposal when Trump first floated it during the 2024 presidential campaign found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back. The administration has amplified that research, posting it on one of the White House’s official Twitter pages.
Bank lobbyists, many who have been spending much of the past week scrambling to figure out what the White House has planned for their industry, have been left in the dark. There have been bills introduced into both houses of Congress by both Republicans and Democrats this year and years past, but House and Senate Republican leadership have been cold to the idea of passing a law capping interest rates.
The Dodd-Frank Act, the law passed after the 2008 financial crisis that overhauled the financial industry, explicitly prohibits at least one federal bank regulator from setting usury limits on loans.
Without a law or executive order, it may simply come down to Trump using political pressure to force the credit card industry to do what he wants, as he’s done with other industries. For example, Trump demanded that pharmaceutical companies cut drug prices, which resulted in some pledges by drug industry CEOs to do what he asked. Trump also demanded chip makers and tech companies move production to the U.S., which also resulted in companies like Apple committing to build more manufacturing capacity domestically.
Wall Street has little interest in an all-out war with the White House, especially as banks have benefitted from the industry-friendly, deregulatory agenda that Trump administration has provided so far. The One Big Beautiful Bill, signed in to law in July, pushed another significant round of tax cuts. And deregulation pushed companies to embrace dealmaking last year, which led to a steady stream of investment banking revenues and fees to the big banks.
When it comes to credit card rates, the messaging out of the bank lobbying groups and bank executives has been two-fold: They have pushed back on the cap but in the same breath have offered to work with the White House.
In a call with reporters on Tuesday, JPMorgan’s Chief Financial Officer Jeffrey Barnum indicated the industry was willing to fight with all resources at its disposal to stop the Trump administration from capping those rates. JPMorgan is one of the nation’s biggest credit card companies. Its customers collectively holding $239.4 billion in balances with the bank, and it has major co-brand partnerships with companies such as United Airlines and Amazon. JPMorgan also recently acquired the Apple Card credit card portfolio from Goldman Sachs.
Mark Mason, Citigroup’s chief financial officer, told reporters on Wednesday that a cap “is not something we could or would support,” saying it would restrict credit to consumers and harm the economy. But at the same time, Mason said, “Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this.”
Trump took further aim at the card industry when he endorsed a bill in Congress that could negatively impact the amount of money banks earn from merchants every time a customer swipes their card.
Not all companies are waiting for Trump's next move.
Fintech company Bilt launched a new set of credit cards this week and said it would cap customers’ interest rates at 10% on new purchases for a year. While effectively a promotional rate that other credit card companies have used in the past, Bilt’s move could provide an example of how the credit card industry can meet the White House's demands without fundamentally destroying their business model.
“If (a credit card rate cap) is going to happen, we’d rather be at the forefront,” Ankur Jain, Bilt’s CEO, said in an interview earlier this week.
Bilt Obsidian Card, Palladium Card and Blue Card are shown on Wednesday, Jan. 14, 2026 in New York. (AP Photo/Ken Sweet)
FILE - Visa and Mastercard credit cards are shown in Buffalo Grove, Ill., Feb. 8, 2024. (AP Photo/Nam Y. Huh, File)
A sign for Chase bank is seen on an ATM Tuesday, Jan. 6, 2026, in Portland, Ore. (AP Photo/Jenny Kane)
