This week, the industry was rocked by a pair of bankruptcies that could see two shopping mall fixtures disappear.
On Sunday, Forever 21 filed for bankruptcy protection for the second time in six years. Red and yellow liquidation sale signs are already plastered on the windows of hundreds of its US stores.
Meanwhile, Hudson’s Bay, Canada’s oldest department store Hudson’s Bay, needs an immediate financial lifeline, or it will be forced to close 80 stores, as well as three Saks Fifth Avenue stores and 13 Saks Off Fifth locations that the company operates through a licensing agreement.
The twin bankruptcies set alarm bells ringing in an industry already reeling from an unexpected plunge in US consumer confidence and President Donald Trump’s tariff spree.On the heels of the Forever 21 news, credit ratings firm S&P Global released its projection of the median odds of default for publicly traded apparel retailers, which saw an uptick from 3.3 percent on Feb. 13 to 4.2 percent as of March 14. These scores measure the odds of default on debt within a year and are based on stock fluctuation for public companies on major US exchanges as well as public policies, industry risks and other macroeconomic factors.
But the failures of Forever 21 and Hudson’s Bay shouldn’t be regarded as harbingers for the industry as a whole. In fact, there have been fewer bankruptcies so far in 2025 compared with the same period last year, according to S&P Global data.
Since its first bankruptcy in 2019, Forever 21 under its new owners Authentic Brands Group and mall landlords Simon Property and Brookfield Asset Management struggled to come up with an answer to the rise of Shein and Temu. In a battle waged mainly on price, Forever 21’s Chinese competitors, operating exclusively online and shipping orders directly from factories, were always destined to win.
“While we have evaluated all options to best position [Forever 21] for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies,” chief financial officer Brad Sell said in a statement Sunday. Authentic Brands Group will continue to own Forever 21’s intellectual property.
Other brands, from H&M to Gap, are threatened by ultra fast fashion as well, but have done more to differentiate their product, and are investing heavily to ensure their in-store experience draws shoppers, rather than sending them to Shein’s app. Fellow mall retailer Pacsun, for instance, has fully recovered from its 2016 bankruptcy and managed to become top of mind among young consumers in recent years through various collaborations and cultural marketing initiatives.
Hudson’s Bay’s demise is a more complicated story. The department store chain never recovered from pandemic-related challenges and the decline in visitors at brick-and-mortar stores in Canada, according to its bankruptcy filing.
“The lasting impacts of the pandemic, including the widespread and continuing trend towards remote work, has decreased further still foot traffic at retail stores, and increased associate economic pressures,” the company said in a court filing.
But here too, the story is more complicated. Even as it dealt with the aftermath of the pandemic, Hudson’s Bay was also caught up in the corporate manoeuvrings of its former parent, HBC, which has spent the last few years putting together a merger between Saks Fifth Avenue and Neiman Marcus Group. Hudson’s Bay itself was spun off from HBC only late last year.
And while all multibrand retailers face the challenges Hudson’s Bay outlined in its filing, more successful chains such as Holt Renfrew in Canada and Bloomingdale’s in the US are driving growth by improving their respective shopping experiences and fine-tuning product assortment to better meet the needs of customers.
If anything, the bankruptcies illustrate the Darwinian nature of retail right now. Shoppers may be discerning than ever, and are reacting to economic pressures by reevaluating their spending on discretionary products, but their appetite for apparel and beauty has not gone away. The most successful players are able to sway consumers by investing in brand identity, experience and being culturally relevant.
In these challenging times, the divide between winners and losers only grows deeper.
THE NEWS IN BRIEF
FASHION, BUSINESS AND THE ECONOMY
Apparel retailer Guess gets take-private offer from WHP Global. Guess received a take-private offer from brand management firm WHP Global of $13 per share, the company announced Monday. Shares of Guess jumped 31 percent in early trading and the company was valued at $500 million as of Friday.
Saks owner tries to avoid liquidation for Hudson’s Bay. HBC told a Toronto courtroom on Monday that it has been unable to fully recover from the sales impact of the Covid-19 pandemic. Amid changing shopping habits, brick-and-mortar stores have struggled to compete with e-commerce businesses.
Forever 21 to close stores in bid to mimic online rivals’ model. Should the fast fashion retailer fail to find a rescuer, Forever 21 plans to ship goods directly from overseas factories to consumers and other retail outlets, Bloomberg reported, despite just 11 percent of Forever 21’s sales last year having been online.
Anta Sports shares plunge as full-year operating margin misses. Shares of China’s biggest sportswear maker fell as much as 7.4 percent in Hong Kong after the company reported an operating margin decrease of just over a percentage point. The decline was caused by increased spending on branding, sales channels and research and development.
Temu-owner PDD’s revenue misses estimates as expansions slow. The e-commerce company’s revenue grew a less-than-anticipated 24 percent following intensifying domestic competition and elevated US tariffs on Chinese products. PDD Holdings Inc. reported revenue of 110.6 billion yuan ($15.3 billion) for the December quarter. Temu also faces the potential closure of a tax loophole for small-value parcels.
Louis Vuitton in talks with Cheng family for Hong Kong mega-store. The Hong Kong real estate company New World’s shares rose as high as 10 percent on Tuesday. LVMH stock rose as high as 1 percent in early trading, but is still down almost 30 percent in the past year.
THE BUSINESS OF BEAUTY
Milk Makeup owner Waldencast’s sales rise 27.5 percent. The company’s net revenue reached $273.9 million, due in part to viral products like Milk’s Jelly Tint blush. However, sales projections, like several other beauty companies’, predict a deceleration in 2025, with a “relatively flat” first quarter due to retailers’ inventory adjustments.
PepsiCo to acquire prebiotic soda brand Poppi for $1.95 Billion. The sale comes as prebiotic sodas have emerged as a top-growing category of carbonated drinks in the US and demand for traditional PepsiCo beverages and snacks has fallen. Following the news, shares of PepsiCo were up 1.5 percent in early trading.
Sir John appointed creative director of Medicube. On Tuesday, Korean skincare label Medicube announced that makeup artist Sir John, known for his work with Beyoncé, Zendaya and Serena Williams, will advise on marketing and product development and host events for the 11-year-old brand.
PEOPLE
Nike’s top strategy, communications officers exit in shakeup. Nike’s chief strategy and transformation officer Daniel Heaf and chief communications officer KeJuan Wilkins have left the sportswear giant, adding to a slew of senior leadership changes under CEO Elliott Hill, who rejoined the company in October.
MEDIA AND TECHNOLOGY
US Vice President Vance tells NBC News he expects a ‘high level’ TikTok deal by April 5. “There will almost certainly be a high-level agreement that I think satisfies our national security concerns, allows there to be a distinct American TikTok enterprise,” Vance told reporters aboard Air Force Two. TikTok faces a deadline of April 5 to strike a deal for its US operations.
Compiled by Yola Mzizi.
