Europa Press 'Shein Is to Blame': An American Chain Closes 350 Stores and Lays Off Everyone
Shein, the Chinese giant that drove Forever 21, the beloved American brand, into bankruptcy
The fashion chain Forever 21 has announced the closure of all its stores in the United States after declaring bankruptcy for the second time in six years. The company, which at its peak had more than 800 stores worldwide, couldn't compete against the new generation of digital retailers, led by Shein and Temu.
Shein's rise has been meteoric. Its business model is based on direct sales from factories in China without intermediaries. This has allowed it to offer extremely low prices and renew its catalog with thousands of new products every week.
This approach has displaced traditional brands like Forever 21, which couldn't match the speed or costs of the competition.
The Decline of Forever 21
During the 2000s and early 2010s, Forever 21 was a benchmark in affordable youth fashion. Its stores in shopping malls attracted millions of customers looking for trendy clothes at low prices. However, the rise of e-commerce and changes in consumer habits gradually weakened its business model.
The first major warning sign came in 2019, when the company declared bankruptcy for the first time. At that time, it closed hundreds of stores and reduced its international presence. Despite these efforts, it couldn't adapt to the digital competition.
Shein and the New Era of Fast Fashion
Meanwhile, Forever 21 was trying to restructure, Shein was establishing itself as the most popular fast fashion platform among young people. Its strategies were devastating:
Ultra-low prices: Thanks to the de minimis exemption in the United States, Shein can import products without paying tariffs, allowing it to maintain much lower prices than its traditional competitors.
Real-time production: Shein uses artificial intelligence to analyze trends and produce small quantities of new designs. If a product sells well, they make more; if not, they quickly discard it.
Direct-to-consumer sales: Without intermediaries or large warehouses, Shein reduces logistical costs and can offer constant discounts.
Social media marketing: The brand has dominated platforms like TikTok and Instagram, collaborating with influencers to attract a young audience.
Forever 21, with its model based on physical stores and mass production of collections, couldn't compete with this flexibility.
The Final Blow
In 2024, Forever 21's situation became unsustainable. Inflation and low traffic in shopping malls reduced its sales. At the same time, Shein and Temu continued to capture customers with aggressive promotions and fast shipping.
Finally, in March 2025, Forever 21 announced the liquidation of all its stores in the U.S. The brand will continue to operate online under the management of Authentic Brands Group, but its physical presence will disappear from the country.
The collapse of Forever 21 marks the end of an era in fashion retail. While Shein continues to dominate the market, other traditional brands face similar challenges. The industry has changed, and only those companies that adapt to digital commerce and new consumer trends will survive.
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