The apparel industry in the US continues to struggle amid sweeping changes. Many of the troubled retailers are located in malls, where fewer shoppers are spending their money. As sales decline, companies are still weighed down by large, expensive store bases even as retailers need to invest in technology to fend off competition from new brands born online. With consumers moving from one fashion trend to another faster than ever, US retailers are collectively being pushed to get away from the traditional model, which values low costs above all else.

As a group, apparel retailers’ first quarter results are down 24 per cent. The last time the group’s earnings were this bad was the first quarter of 2008, when they fell 40 per cent. Forever 21 is exploring restructuring options to shore up its liquidity. Forever 21 has more than 815 stores in the US and worldwide. The company is in talks with private equity firm Apollo Global Management about raising debtor-in-possession funds to provide financing should it file for bankruptcy.

Teen clothing retailers have found themselves particularly vulnerable to the retail upheaval. A number of them have filed for bankruptcy over the past few years, including Aeropostale and American Apparel.