The American retail landscape underwent a seismic restructuring in 2025, defined by the collapse of legacy fast-fashion icons under the weight of ‘ultra-fast’ digital competition. Data from Coresight Research confirms, roughly 8,200 stores shuttered nationwide last year - a 12 per cent rise from 2024 - marking the highest level of retail volatility since the pandemic. The most striking casualty was Forever 21, which wound down all US operations after failing to defend its mall-based empire against the aggressive pricing of cross-border e-commerce giants.
The pricing chasm and the de minimis shift
Strategic missteps in physical site selection were exacerbated by a pricing war Forever 21 could not win. While the brand struggled with rising domestic labor costs and brick-and-mortar overhead, overseas competitors like Shein and Temu leveraged a $100 billion global scale to capture cost-conscious Gen Z shoppers. However, the sector faces a new turning point in early 2026 as the federal government eliminates the ‘de minimis’ trade exemption. This policy shift, which previously allowed duty-free entry for packages under $800, is expected to drive up import costs for digital retailers, potentially offering a slim window of opportunity for surviving domestic apparel brands.
Shifting toward experience and value
As discretionary spending on durable goods is projected to rise by 4.7 per cent in 2026, the industry is witnessing a ‘Great Retail Reset.’ Legacy survivors are moving away from the high-volume, low-quality model that doomed Forever 21. Retail analysts note a decisive trend toward ‘phygital’ strategies - merging interactive in-store experiences with seamless digital fulfillment. The retailers that will thrive are those who view their physical footprint as a strategic advantage rather than a liability, noted one industry CEO. With inflation easing to 2.3 per cent, the focus is now on justification of price through quality, as consumers trade blind brand loyalty for tangible value and sustainability.
Retail restructuring and legacy management
Forever 21 was a Los Angeles-based fast-fashion pioneer that once operated 800 global stores. Following its 2025 liquidation, its brand intellectual property remains under Authentic Brands Group. The company is now exploring a digital-only licensing model to service international markets while exiting high-cost US physical real estate entirely.
