The Operator of Forever 21 Has Filed for Bankruptcy in the United States.

Forever 21 may be closer to ceasing operations in the US after its parent company filed for bankruptcy protection.

The company announced that its US stores and website will remain open as it begins the process of winding down. Once popular among young women globally, Forever 21 has faced challenges in attracting customers due to rising prices and the increasing shift to online shopping.

The brand previously filed for bankruptcy protection in 2019, but was acquired by investors through a joint venture. “We have been unable to find a sustainable path forward, given competition from foreign fast-fashion brands… as well as rising costs and economic pressures on our core customers,” said Brad Sell, the CFO, in a statement.

The company plans to conduct liquidation sales and may sell some or all of its assets through a court-supervised process. “If a successful sale occurs, the company may reconsider a full shutdown of operations,” the statement noted.

Chapter 11 protection temporarily suspends a company’s obligations to creditors, allowing time for debt reorganization or asset sales.

Forever 21’s operations outside the US, including its stores and e-commerce platforms, will remain unaffected as they are managed by other license-holders.

Founded in 1984 by South Korean immigrants in Los Angeles, the retailer grew popular for its affordable, trendy clothing and accessories, becoming a competitor to brands like Zara and H&M. At its peak in 2016, Forever 21 operated 800 stores worldwide, with 500 in the US.