Home improvement companies and retailers have faced macroeconomic challenges over the last five years since the Covid-19 pandemic with sluggish home sales contributing to a decline in business. A combination of rising interest rates,

F21 OpCo, LLC, the company and licensee of the brand in the U.S., filed a Chapter 11 case in the U.S. Bankruptcy Court for the District of Delaware. Although stores will remain open for now, Forever 21, which is headquartered in Los Angeles, said it will hold liquidation sales at its U.S. stores.

The international operations and the intellectual property of the fast-fashion business are not a part of the bankruptcy.