The Rise and Fall of Forever 21: A Fast-Fashion Fable

Too Much, Too Fast: The Trap of Overexpansion

The retail graveyard is littered with the tombstones of brands that expanded too quickly, spreading themselves thin across a vast landscape of square footage. Forever 21 is the latest victim of this familiar trap, joining the ranks of Gap, Macy's, Abercrombie & Fitch, and many others who succumbed to the allure of rapid growth.

Forever 21's story, however, isn't just a simple tale of overexpansion. It's a complex narrative interwoven with changing consumer preferences, fierce competition, and a failure to adapt to the evolving retail landscape.

From Fast-Fashion Darling to Retail Casualty

For two decades, Forever 21 rode the wave of fast fashion, offering trendy clothing at affordable prices. But as consumers began prioritizing quality over quantity, the retailer struggled to keep up. The rise of online giants like Amazon and fast-fashion competitors like Shein and Temu, coupled with the enduring strength of brands like Zara and H&M, further eroded Forever 21's market share.

"All business failures really start with the merchandise," observes Ivan Friedman, president and CEO of RCS Real Estate Advisors. "Retailers have to keep the customer focused and interested in what they have. Customers are very fickle, especially in fast fashion."

Missed Opportunities and Internal Challenges

Forever 21's struggles weren't solely due to external pressures. The company failed to fully embrace e-commerce, lagging behind competitors in online sales. Attempts to diversify into new categories, like beauty with Riley Rose, proved unsuccessful. Oversized stores with redundant merchandise created inventory management nightmares, slowing down the very "speed to market" that was once the brand's defining strength.

Craig Johnson, president of Customer Growth Partners, notes, "Forever 21 got the model right, becoming true fast fashion, but in the '90s up until 2021, there was this 'crazy town expansion'… It started at 5,000 or 6,000 square feet per store. They ramped it up to 25,000 square feet, even to 40,000 square feet or more." This rapid growth left them vulnerable to the shifting sands of the retail landscape.

The Final Act: Bankruptcy and Liquidation

After a brief respite following its 2019 bankruptcy, Forever 21 ultimately filed for bankruptcy again in March 2025, leading to the liquidation of all its U.S. stores. While external factors like tariffs and rising costs played a role, internal missteps and a loss of focus ultimately sealed the brand's fate.

William Susman, managing director of Cascadia Capital, points out, "The case of Forever 21 once again reinforces the importance of a brand speaking to its customers by offering quality design and fashion relative to the price position. It's product, product, product."

The Legacy of Forever 21

From humble beginnings in a 900-square-foot Los Angeles store to a global empire, Forever 21's story is a cautionary tale of the perils of unchecked growth and the importance of adapting to the ever-changing demands of the consumer. While the brand may be gone from the U.S. retail scene, its legacy serves as a reminder that even in the fast-paced world of fashion, sustainability and a keen understanding of the customer are essential for long-term success.