Major mall retailer explores bankruptcy and shutting down all locations

Major mall retailer explores bankruptcy and shutting down all locations

After the heyday of malls during the 1980s and 90s, when trips to the mall were an everyday occurrence, the convenience of internet shopping pulled consumers away from the malls in the new millennium. Mall retailers who didn't evolve and offer online shopping saw revenue decline and financial distress increase.

The retail sector faced even more serious economic challenges with the onset of the Covid-19 pandemic beginning in 2020, which led to out-of-court restructurings, bankruptcy filings, hundreds of store closings, liquidations, and companies going out of business.

The list of retail chains that filed for bankruptcy and disappeared from malls and shopping centers during and right after the pandemic includes: Tuesday Morning, Christopher & Banks, Stein Mart, and Lord & Taylor.

More recently, beauty retailer The Body Shop filed for Chapter 7 on March 9, 2024, liquidated and closed all of its stores, and teen and young adult apparel retailer Rue 21 filed for Chapter 11 protection for a third time on May, 2, 2024, and closed all 540 of its locations in the U.S. that were located in malls and shopping centers.

Retailers file bankruptcy and liquidate

Party City filed for Chapter 11 for a second time in December 2024 with plans to liquidate and close all of its stores, citing rising inflation and fierce competition for its financial distress.

Joann Fabrics filed for Chapter 11 bankruptcy on March 18, 2024, and a second time on Jan. 15, 2025, failed to find a buyer and closed all 800 of its stores and liquidated its assets.

Home goods retailer Big Lots on Sept. 9, 2024, filed for Chapter 11 bankruptcy seeking to sell its assets, but chose to liquidate its 1,392 stores when a proposed sale fell through in December 2024.

The company got a second life after Gordon Brothers Retail Partners purchased the company's assets with plans to resell stores, distribution centers, and intellectual property to other retailers.

The company subsequently reached an agreement with Variety Wholesalers Inc. to purchase 200 to 400 Big Lots stores and operate them under the Big Lots brand, along with up to two distribution centers.

Forever 21 is having difficulty selling its assets

And now, popular fashion retailer Forever 21 is planning to close all of its stores and file for bankruptcy in the days ahead, sources with knowledge of the plans told Bloomberg.

Forever 21's operator has reportedly been trying to find a buyer for its assets to avoid a liquidation and bankruptcy filing, but discussions with a potential bidder have not been successful.

The retail chain's operator had already been planning to shut down at least 200 of its 350 stores as part of a bankruptcy filing, Bloomberg reported in February, and liquidations and closings were already underway at mall locations around the country.

Forever 21's operator, F21 OpCo LLC, is owned by Catalyst Brands through an acquisition in January. Catalyst is a joint venture of Authentic Brands, Simon Property Group, Brookfield Properties, and Shein.

The teen and young adult fashion retailer first filed for bankruptcy in 2019 and was sold to a joint venture of Authentic Brands, Simon Property Group, and Brookfield Properties in February 2020 for $81 million, just before the Covid-19 pandemic devastated the retail sector.

The retail chain, at one time, had as many as 500 locations in the U.S. and about 800 worldwide.