It’s time to write the obituary for a star of the fast fashion world. Retailer Forever 21 declared bankruptcy this week — the second time in six years. This time, the company blamed competition from foreign fast fashion companies.

After its first bankruptcy filing, we could still keep going to Forever 21 stores, because sometimes companies file for bankruptcy, they fix some problems, and they survive. 

But “the problems that brought it to the brink in 2019 didn’t really go away,” said James Gellert, who co-founded the business analytics company RapidRatings. 

Forever 21 is not bouncing back this time, he said. The company’s financial health is low, its debt is high, and customers have started shopping elsewhere.

“Many of the companies that have had all three of those problems, it then becomes a bit of a death knell,” Gellert said.

And a lot has changed in the past six years. Temu didn’t exist until 2022; Shein took off around the same time. Now, they’re both a primary reason for Forever 21’s downfall, according to John Mercer with the research company Coresight.

“Companies like Shein and Temu who are grabbing tens of billions of dollars of sales, most of that is coming from incumbent, legacy retailers,” he noted. 

That includes retailers like Forever 21. Those other places are winning out because — simply — their clothes are cheaper, Mercer said. 

Right now, demand for cheap clothes is pretty high “because Americans are feeling the pressure from higher inflation, and then they’ve offered extremely competitive prices,” he said. 

Thing is, similar companies — like Zara, H&M and Uniqlo — are still in business. While the market has been tough, some of Forever 21’s are unique.

Santiago Gallino, who teaches at the University of Pennsylvania’s Wharton Business School, said these other brands were nimbler and more responsive to changing customer preferences.

“Versus this approach where you make a big bet on a design or a style, and then you place a huge order, bring it to the market, hoping for the best, and then it doesn’t work,” he said.

Forever 21 grew really fast when it first started and bought up too much retail space all at once, Gallino added. “And that is sometimes evident on hindsight. But when you’re growing and you’re growing fast, it’s not so easy to detect when you have break the point of overinvesting and overexpansion.”

Forever 21 might not be the last brick-and-mortar chain to close this year; Coresight’s John Mercer says there are more to come because of the unbeatable prices of online, overseas competition.