Forever 21 is closing its U.S. stores because it filed for Chapter 11 bankruptcy in March 2025 due to several factors: intense competition from international fast fashion brands like Shein and Temu, rising costs driven by inflation, economic difficulties, and changing consumer behavior. The company struggled to compete with these online competitors who benefit from trade loopholes allowing cheaper imports, and it also faced decreased mall traffic and increased operational expenses. Unable to find a buyer for its U.S. stores, Forever 21 began an orderly wind-down, closing all 354 U.S. locations by May 1, 2025, while maintaining international operations. The brand’s financial health was poor with high debt and declining customer interest, making recovery unlikely this time around after its second bankruptcy filing in six years.