In 2025, the United States retail sector saw a pronounced wave of store closures, impacting a host of familiar retail brands. Approximately 8,200 retail locations shut their doors, an increase of roughly 12% compared to the previous year. These closures are emblematic of broader structural challenges confronting the retail industry, including alterations in consumer preferences, financial strains, and lingering inflationary pressures.
Among the prominent retailers affected was Forever 21, a brand whose moniker suggests perennial presence but ultimately fell short of longevity. The company filed for bankruptcy protection for the second time in March 2025 and subsequently ceased its U.S. operations, resulting in the shuttering of approximately 500 stores nationwide. The company attributed its downfall to "economic challenges impacting our core customers," a reference to the price-sensitive teenage demographic whose loyalties have shifted to competitors. These include international fast fashion players such as Shein and Temu, whose growth was bolstered by rapid expansion in online shopping during the pandemic era. Forever 21 further struggled to contend with import tariffs imposed under the Trump administration, which raised costs and complicated supply chain dynamics.
Another significant casualty of the retail downturn was Joann Fabrics, a crafts and fabrics retailer that closed its doors in February 2025 after more than 80 years in operation. Joann filed for Chapter 11 bankruptcy protection twice within a twelve-month period, highlighting severe operational and financial hurdles. The company referenced sluggish sales, inventory mismanagement, and a substantial debt load as core factors precipitating its closure. Former CEO Michael Prendergast noted in a January statement that the retail environment's "significant and lasting challenges," combined with the company's constrained financial and inventory situations, necessitated liquidation. However, the brand's legacy persists as Michaels, a competing crafts retailer, revived the Joann name and select private labels through a "store within a store" format.
Party City, widely recognized for party supplies such as balloons and decorations, also concluded its retail operations in February 2025, having initially declared bankruptcy in January 2023. The company, which had operated for four decades, grappled with a debt burden exceeding $1.7 billion at one stage, undermining its ability to sustain operations. Party City's competitive landscape was particularly challenging, facing pressure from e-commerce platforms, seasonal pop-up retailers like Spirit Halloween, and large general merchandise retailers including Walmart and Target.
Pharmacy chain Rite Aid, once a major player in the American drugstore sector, shut its stores in October 2025 after a second bankruptcy in recent years. Established in 1962, Rite Aid garnered attention for its in-store ice cream brand, Thrifty, which was sold during bankruptcy proceedings. The initial bankruptcy filing occurred in October 2023, driven by mounting competition from larger pharmacy chains and a debt load exceeding $4 billion, largely connected to costly legal issues associated with opioid prescription practices. Although Rite Aid emerged from bankruptcy protection in September 2024—reducing debt by $2 billion, closing 500 locations, and securing $2.5 billion in operational funding—the company’s store presence continued to diminish. Competitors such as CVS Pharmacy and Walgreens subsequently acquired portions of Rite Aid's pharmacy operations.
The retail environment remains volatile as these examples illustrate the challenges ranging from shifting consumer preferences and entrenched debt to competitive overreach and the complexities of maintaining profitability amid inflationary pressures. The closures of these venerable chains underscore an ongoing evolution in how Americans shop and how retailers must adapt to survive.