Owned by Simon Property Group (SPG -0.48%) and Authentic Brands Group, Forever 21 is a fast-fashion retailer that sells apparel, beauty products, and accessories. Their target customer base is primarily young women, but it sells products for women, men, and children, and shoppers across age ranges buy from its stores and online. However, times have changed, and Forever 21 has thrown in the maxi dress and will be closing its doors forever.
NYSE: SPG
Key Data Points
Fast Fashion
Law of Supply and Demand
Forever 21's Final Days
Despite Forever 21 doing its best to bounce back from bankruptcy, the final days for the company are here. In March 2025, Forever 21 filed yet again for Chapter 11 bankruptcy and has been in the process of liquidation and closing all remaining US stores.
The chief problems plaguing the retailer were a public perception that Forever 21 was, somewhat ironically, a teen brand. As previous customers grew up, they moved into the broader brands of H&M (OTCMKTS:HNNMY) and Zara. Next companies, such as Shein and Fashion Nova, severely undercut Forever 21 by offering similar quality goods at prices no brick-and-mortar chain could ever match.
In a court filing, Stephen Coulombe, the operating company’s co-chief restructuring officer, said Forever 21 was “materially and negatively impacted” by Shein and Temu’s use of the de minimis exemption, which “undercut” its business. The de minimis exemption is a trade loophole that allows goods under $800 in value to be shipped tax-free.
Combine all of these things together, and Forever 21 will forever be a page in business textbooks of when rapid expansion and failure to match consumer trends can end in a business going belly up.
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Alternative Investments
While Forever 21 may have gone the way of the dodo, that doesn't mean that the fast-fashion industry is an investing write-off. There are some other options to consider. Here are a few examples:
- Industria de Diseno Textil Inditex (OTCMKTS:IDEXY): The owner of brands like Zara, Pull & Bear, Massimo Dutti, and Bershka controls a significant slice of the global fast-fashion market. One of its most well-known brands, Zara, controls a sizeable chunk of the fast-fashion market in the U.S. alone. The Inditex Group brought in about 38.6 billion euros (about $44.7 billion) in total sales in 2024.
- American Eagle Outfitters (NYSE:AEO): The clothing and accessories retailer is known for its clothes targeting Gen Z and young adult shoppers. Total revenue in the company's fiscal 2024 rose 4% year over year.
- Hennes Mauritz: The Swedish company is known for its eponymous brand, H&M, as well as brands like COS and Weekday. It reported revenue of approximately 339 billion Swedish krona (about $35 billion) in its last fiscal year..
Although you can't buy Forever 21 stock, you can invest in one of its owners, like Simon Property Group, or in a publicly traded rival. This can help you gain exposure to fast-fashion trends as you build out your investment portfolio.
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