The year has proven exceptionally demanding for corporations across numerous sectors, with a notable surge in bankruptcy filings, and the fashion industry has found itself far from exempt. Amid an environment of pronounced economic uncertainty—shaped by fluctuating inflation, evolving trade policies, and unpredictable consumer confidence—shoppers have become increasingly discerning regarding how and where they allocate their discretionary income. This heightened consumer selectivity has led many to gravitate toward more affordable purchasing options, favoring cost-effective, trend-responsive fast-fashion companies or turning to the growing secondhand clothing market as a means to balance fiscal responsibility with personal style. According to analytics firm GlobalData, fast-fashion giants such as Shein have managed to capture significant market share in 2024, pulling customers away from competing retailers with their low prices, speed to market, and digital dominance.
Throughout the broader retail landscape, many well-established clothing chains and eateries have found themselves unable to withstand these evolving dynamics. Even household names such as the baby apparel company Carter’s and the iconic department store chain Macy’s have been compelled to close physical locations in an effort to preserve profitability. Business Insider has recorded that more than 3,700 stores across the United States shuttered their doors in 2025 alone, underscoring the immense strain under which the retail sector continues to operate.
Adding another layer of complexity to this economic turbulence are the tariffs introduced under President Donald Trump’s administration, which have significantly reshaped global sourcing and production strategies. For fashion companies like Abercrombie & Fitch and Nike, these tariff policies have translated into logistical and financial headwinds—forcing them either to raise consumer prices or to reformulate their international supply chains to curtail rising costs. While some companies have demonstrated agility in navigating these obstacles, others have struggled to recover from reduced in-store traffic, persistent tariff-related expenses, and wider macroeconomic challenges. The year 2025 has therefore witnessed multiple apparel brands seeking bankruptcy protection as they confront the compounded pressures of a transformed retail environment.
Forever 21, once a central symbol of American fast fashion and a destination for young women shopping in bustling malls, epitomizes the sector’s recent hardships. After several consecutive years of declining revenues, the brand has filed for Chapter 11 bankruptcy protection twice within six years. The company’s difficulties stem largely from fierce competition with online-based fast-fashion powerhouses such as Shein and Temu. These digital-native rivals offer an even broader range of extremely affordable, trend-driven items—often at prices lower than Forever 21’s already budget-conscious merchandise. In its March 2025 bankruptcy documentation, Forever 21 cited the so-called “de minimis” trade rule, which allows shipments valued under $800 to enter the United States without being subject to tariffs, as a pivotal factor undermining its ability to compete on price with foreign e-commerce firms. Despite these setback, Authentic Brands Group, the parent company owning Forever 21’s intellectual property, announced in September that it had secured new partners with plans to revitalize the U.S. business and transition it into a primarily digital, innovation-focused brand model.
Another high-profile casualty has been the online retailer Ssense, a company renowned for curating niche, avant-garde luxury fashion labels that appeal to a globally sophisticated clientele. In August, Ssense filed for Canada’s equivalent of bankruptcy protection before the Quebec Superior Court. According to reports from Business of Fashion, CEO Rami Atallah attributed the firm’s financial downfall to trade policies introduced during the Trump administration, specifically tariffs imposing a 35% surcharge on imported goods that fall outside any existing free trade agreements between the United States and Canada. This policy environment, Atallah explained in internal communication to employees, effectively imposed insurmountable costs on the company’s operations and eroded its profitability.
Similarly, Liberated Brands—operator of well-known surf and lifestyle labels including Billabong and Quicksilver—also succumbed to the converging forces of global economic strain. The firm filed for Chapter 11 bankruptcy in February, citing deteriorating profits, supply-chain interruptions, and pervasive macroeconomic pressures as key contributors to its collapse. Although the case was dismissed in May, the company ultimately closed all retail operations within the United States and Canada, marking the end of a significant presence in the North American market for its once iconic brands.
Finally, Sneakersnstuff, a Stockholm-based specialty retailer revered among sneaker enthusiasts for its curated selections and collaborations, declared bankruptcy in January. The news was initially broke by Swedish outlet Ehandel and was later confirmed by co-founder Peter Jansson in a since-deleted social media post. Within a month, the distressed company was acquired by German investment firm Reziprok Ventures in February, signaling the possibility of a strategic restructuring rather than complete dissolution.
Taken together, these corporate unravelings paint a portrait of an industry at a decisive crossroads—an inflection point defined by economic volatility, evolving trade regulations, and shifting consumer loyalties. As traditional retail models falter and digital innovation becomes indispensable, surviving companies will need to reinvent themselves through adaptive strategies, streamlined supply chains, and an amplified digital presence if they wish to endure in an increasingly unforgiving global market.
Sourse: https://www.businessinsider.com/fashion-brands-bankruptcy-2025
