Wave of retail bankruptcies sweeps U.S. chains in 2025

RETAIL giants are struggling to stay afloat in the modern retail ecosystem, with bankruptcies popping up left and right.

A number of popular retail companies have already filed for Chapter 11 bankruptcy in 2025, including three beloved brands that are undergoing the process for the second time.

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More and more retail giants are filing for bankruptcy due to industry struggles[/caption]

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Many retailers are filing for bankruptcy and closing down stores due to the so-called “retail apocalypse”[/caption]

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The U.S. Sun spoke with retail expert Dominick Miserandino on mass store shutdowns and bankruptcies, as well as his stance on the “retail apocalypse”[/caption]

The dynamic and ever-changing structure of retail today has proven challenging for small and large companies alike, pushing fears of the so-called “retail apocalypse.”

This term refers to the feared collapse of the retail industry due to the fact that many well-known department stores and chain retailers have struggled or filed for bankruptcy in recent years.

These mass shutdowns began around 2010 and have been worsened as consumers increasingly turn to online shopping, with e-commerce companies like Amazon, Shein, and Temu attracting shoppers’ dollars.

The pandemic further strengthened this trend, resulting in a major drop in retail sales and some 10,000 permanent store closures in 2020, per data from Coresight Research.

The affects of the retail apocalypse have carried into 2025, with the research firm estimating a whopping 15,000 shutdowns this year.

“Retail is getting squeezed from all sides,” Dominick Miserandino, CEO of Retail Tech Media Nexus, told The U.S. Sun.

He noted that increased operational costs from inflation, wages, and tariffs have made it more expensive to run a business, while higher interest rates make it tougher to service debt.

Simultaneously, Americans are shifting their buying habits.

“They’re more value-driven, more online, and less loyal to traditional brick-and-mortar stores. That’s why we’re seeing so many companies stumble in 2025. The economics are tough,” he said.

This particularly challenging retail landscape has pushed many bankruptcies so far in 2025, and many more are likely to come.

JOANN

Joann, a more than 80-year-old chain, had seen faltering sales for years in the wake of the pandemic, when the store saw a DIY-driven spike in sales.

The company has filed for bankruptcy twice as a result, the first time being in March last year when Joann aimed to restructure its mounting debt.

At the time, the retailer said its stores would remain open.

However, Joann continued to struggle to compete with online retailers and competitors like Hobby Lobby and Michaels, pushing the beloved arts and crafts retailer file for bankruptcy yet again in January.

Interim CEO Michael Prendergast shared that the company’s top bosses thought selling Joann was the best course of action, with the retailer ultimately going out of business and shuttering all of its nearly 800 locations across 49 states before June rolled around.

CLAIRE’S

Longtime mall staple Claire’s has similarly filed for bankruptcy twice.

The retailer first filed back in 2018 due to its billions of dollars in debt as well as other factors like declining mall traffic and increased competition from online retailers.

Turnaround efforts to modernize Claire’s were unsuccessful, including expanding its retail partnerships with companies like Walmart and Walgreens as well as introducing a loyalty program.

As a result, the retail chain filed for bankruptcy yet again this August.

“Claire’s was not immune from the continued trend away from brick and mortar and more recent macroeconomic challenges, including higher interest rates, labor costs and, most recently, tariffs,” the company said in a bankruptcy declaration.

“While Claire’s took many steps over the last few years to address these and other challenges, it was not enough to overcome the obstacles.”

FOREVER 21

Fast fashion chain and mall staple Forever 21 first filed for Chapter 11 bankruptcy back in 2019 due to reasons including its over-reliance on large physical stores and failure to adapt to the rise of online shopping.

The company launched a restructuring effort, including the shutdown of hundreds of stores as well as Forever 21’s exit from several international markets.

A group of mall operators and brand licensing companies acquired the struggling chain soon after, with the pandemic then further hurting Forever 21’s financial standing.

The retailer even took strides to boost its market presence via partnerships with other fast fashion brands such as Shein, although the company’s efforts were not enough.

This time, Forever 21’s US operator, F21 OpCo, entered bankruptcy and ultimately decided to shut down all the retailer’s more than 350 locations across the country. 

WHAT’S TO COME?

Although the term “retail apocalypse” hints at a widespread collapse of the retail industry, that is not the case, according to Miserandino.

Consumers, retail workers, and small business owners generally view the “retail apocalypse” as a crisis because they experience first hand the closures, layoffs, and vanishing brands.

On the other hand, experts like Miserandino view the situation as an evolution of retail rather than an apocalypse.

“Physical retail isn’t dead. It’s evolving,” said the retail expert.

“Stores that treat their locations like warehouses are going to keep closing. But the brands that thrive will be the ones who understand that experiential is king.

“A store has to be more than shelves it has to be a reason for a customer to visit.”

The U.S. Sun previously spoke with Miserandino on why Aldi rolled out a controversial change in a copycat move to Target and Walmart.

He also talked about how Walmart, Costco, and Target are facing $50 fines under a new “abandoned” shopping cart bill and how they could spell price increases.