Fast fashion brand Forever 21’s parent company has filed for bankruptcy, a move expected after previously announcing a number of layoffs and store closures. Forever 21’s locations outside of the United States are operated under different licensee agreements and not involved in the Chapter 11 filing.

The retailer, known for its cheap, trendy clothes, has faced increased competition in recent years from brands like Shein and Temu.

“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, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends,” Brad Sell, chief financial officer of F21 OpCo, said in a statement.

He added that the company would “wind down” its operations unless it found a buyer.

A long time coming?

Last month the company announced plans to lay off 358 people at its downtown headquarters as it closes its office in filings with the California Employment Development Department.

In December, its Chief Executive Winnie Park left the company to lead Philadelphia-based Five Below. She led Forever 21 since 2022.

Meanwhile, the company began to close hundreds of locations.

Forever 21’s intellectual property is owned by Authentic Brands Group, a brand management firm which took over when Forever 21 first filed for bankruptcy in 2019. Nationally, Forever 21 is operated by Catalyst Brands, a joint venture of Sparc Group and JCPenney. Authentic Brands will still own the brand’s IP and may license it to other operators.