Suppliers from across Asia and other regions have issued complaints against the fast-fashion giant, alleging that the company deceived them right before filing for bankruptcy again in March 2025. The abrupt closures of Forever 21’s stores in the United States have left many feeling misled and out of pocket. Some even claim the brand used their resources as a last-ditch effort to stay afloat.
In the end, millions of dollars in goods remain unpaid, and frustration is running high. Who can blame them for feeling betrayed? Now, suppliers are seeking compensation and voicing their outrage at what they consider unethical practices.
Why the permanent closure of Forever 21’s stores in the United States has sparked global controversies among its foreign suppliers
According to several affected manufacturers, Forever 21 requested steep discounts—sometimes as high as 50%—shortly before announcing bankruptcy. Leukon Inc., a South Korean sportswear firm, says it lowered prices in good faith, only to learn that the retailer was on the brink of financial collapse. Its founder, Kyuseung Ahn, is demanding more than $10 million in unpaid bills and claims the company “tricked” him into finalizing the deal.
Court documents suggest Forever 21 might have inflated its inventory and then liquidated the merchandise without paying. On top of that, the brand’s creditors’ committee estimates that a whopping $433 million is owed to various suppliers. Unfortunately, under U.S. bankruptcy laws, “secured” creditors take priority, leaving others with a slim chance of recovery.
How the brand’s March 2025 bankruptcy filing triggered widespread frustration and multi-million dollar legal claims from overseas manufacturers
After being absorbed by Sparc Group, Forever 21’s debt allegedly ballooned from $230 million to $1.6 billion. Manufacturers say this merger failed to provide any genuine relief. Instead, it created a deeper financial hole and eroded the company’s reputation among global partners. Below is a brief table summarizing some of the key claims from major suppliers:
| Supplier | Claimed Amount | Primary Complaint |
|---|---|---|
| Leukon Inc. | Over $10 million | Deceptive discount requests before bankruptcy |
| Various Chinese Co. | Not publicly stated | Unpaid invoices for product shipments |
| Southeast Asia Co. | Part of $433 million | Inflated orders and sudden liquidation practices |
These suppliers say they can barely afford the legal costs required to fight for their money. Some are questioning if the fast-fashion model is sustainable, given the high risk of unpaid debts when big retailers go under.
A cautionary tale for other fast-fashion ventures
In essence, Forever 21’s downfall highlights serious flaws in the industry’s practices. Shady discounts, inflated inventory, and last-minute orders have left manufacturers worldwide feeling exploited. Will this mark the beginning of the end for brands that run on razor-thin margins and questionable tactics? Only time will tell. For now, many hope the legal system will ensure at least partial reimbursement. After all, these are businesses that believed in a global partnership—only to discover they were left holding the bag.