April 2025 has marked a pivotal moment for the retail industry, with the bankruptcy filings of three high-profile companies: Forever 21, Hudson’s Bay Company (HBC), and Publishers Clearing House (PCH). These collapses not only symbolize the end of an era for each brand but also highlight broader issues plaguing the retail sector—ranging from digital disruption and shifting consumer behavior to unsustainable business models and mounting operational debt.
Forever 21: Fast Fashion’s Unraveling
Forever 21, once a staple of American mall culture and a powerhouse in the fast fashion industry, filed for Chapter 11 bankruptcy protection for the second time in March 2025. This time, the company announced its complete exit from the U.S. market, with plans to close all 350 domestic locations by May 1, 2025. The decision follows years of declining mall foot traffic, growing competition from digital-first brands like Shein and Temu, and an inability to pivot effectively to e-commerce.
The brand’s financial condition underscores its precarious position: it owes approximately $433 million to unsecured creditors, many of whom are small and midsize suppliers in the U.S. and abroad. Under the proposed restructuring plan, these creditors are projected to recover just 3% to 6% of their claims. This development has raised significant concerns across the fashion supply chain, particularly for vendors reliant on timely payments from large retail clients.
Forever 21 has advised customers to redeem gift cards and store credits before the May 1 shutdown date. Notably, international operations in regions like Latin America and Asia remain unaffected, suggesting a possible pivot to markets where mall culture still holds sway.
Hudson’s Bay Company: The End of a 355-Year Canadian Legacy
Hudson’s Bay Company, the oldest company in North America with a history dating back to 1670, filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act (CCAA) in March 2025. Facing $950 million in debt, the company announced plans to shutter all 80 Hudson’s Bay stores, as well as its Canadian Saks Fifth Avenue and Saks Off 5th outlets.
Initial restructuring plans proposed keeping six profitable locations open; however, a series of court rulings in April made clear that such efforts were unlikely to succeed. By April 25, liquidation sales had commenced, and all remaining stores are scheduled to close by June 15, 2025.
The company’s downfall has been attributed to a 33% decline in year-over-year sales and a 50% collapse in e-commerce revenue in 2024. These losses were further exacerbated by financing difficulties and operational delays, particularly in supplier payments. The collapse of such an enduring institution is a sobering reflection of how even legacy retailers with centuries of history are not immune to modern economic and technological pressures.
Publishers Clearing House: Reinvention Amid Collapse
Publishers Clearing House, a name long synonymous with direct mail sweepstakes and television commercials featuring oversized checks, filed for Chapter 11 bankruptcy in April 2025. The filing revealed a steep imbalance between assets ($11.7 million) and liabilities ($65.7 million).
In response, the company announced a major pivot away from its traditional print-based operations, including direct mail and magazine subscriptions. Instead, PCH plans to double down on its digital transformation strategy, with renewed focus on online sweepstakes, digital advertising, and interactive gaming.
A $5.5 million debtor-in-possession loan from Prestige Capital is helping keep the company afloat during its reorganization. Executives at PCH have emphasized their intent to modernize the brand while preserving its core identity—an effort that reflects broader market trends toward mobile-first consumer engagement and the phasing out of legacy marketing methods.
Lessons from April’s Bankruptcy Wave: A Call to Action for Retail
The near-simultaneous collapse of three well-known retail entities is not a coincidence; it is a warning. These cases serve as a stark reminder that resilience in the retail sector requires more than just brand recognition or historical prestige. Companies must innovate continuously, remain responsive to consumer needs, and embrace operational agility.
Key takeaways from this month’s retail bankruptcies include:
- Digital Urgency: The failure to invest in and scale digital operations continues to separate thriving companies from those in decline.
- Financial Fragility: High levels of debt, when combined with cash flow disruptions, create a recipe for rapid collapse.
- Consumer-Centric Strategy: Shoppers today prioritize personalized, frictionless experiences—especially online. Legacy models anchored in in-store sales and traditional marketing are no longer sufficient.
- Vendor Relations: The fallout from these bankruptcies underscores the systemic risks vendors face when dealing with large, financially unstable retailers.
As retail continues to evolve, businesses that succeed will be those that act decisively, invest in technology, and build stronger relationships with their consumers and supply chain partners. The stories of Forever 21, Hudson’s Bay, and PCH offer both a cautionary tale and a strategic blueprint for those able to adapt.
By Deanna Rahmani
The author interacted with the following artificial intelligence tools to create or assist in the creation of content included in this blog: ChatGPT
