The retail sector is always subject to dynamic changes, driven by consumers who seek solutions to their evolving needs. These needs are often influenced not only by immediate requirements, such as replacing worn-out shoes, but also by broader economic factors, like the potential impact of tariffs on shoe prices.
While consumer needs remain constant, the modern economic environment presents challenges across various industries. Retailers, from hardware to fashion, face significant pressures. As 2025 unfolds, retailers and consumers alike are experiencing difficulties, with several well-known chains confronting substantial challenges or even ceasing operations. Here’s a closer look at the struggles facing these companies.
Joann Fabric and Crafts
The unexpected downfall of Joann Fabric and Crafts, once a dominant player in the craft industry, has surprised many. Despite being a Fortune 1000 company a few years ago, Joann has seen a dramatic decline in value. It filed for bankruptcy last year and again in January 2025. The company attributes its market exit to “significant and lasting challenges in the retail environment,” though the financial history tells a more complex story. Acquired by Leonard Green & Partners in 2011, Joann faced a leveraged buyout, leading to a significant debt burden. Despite seeing profits grow, this debt proved insurmountable for Joann’s extensive retail network.
Hooters
According to Bloomberg, Hooters is on the brink of bankruptcy. Facing a high debt load, the restaurant chain’s identity, rooted in serving wings with a male-centric environment, is losing its appeal amid changing social attitudes. With 420 locations worldwide, Hooters is adjusting to a more family-oriented vision. The shift in customer preferences and competition from other wing establishments have further weakened its market position.
Fisker
Fisker, the electric vehicle manufacturer, filed for bankruptcy in 2024, leading to a liquidation of its assets. Although Fisker’s Ocean SUV models were delivered to American Lease, the company itself has ceased operations. The breakdown of a partnership between American Lease and the Fisker Owner’s Association has left remaining Fisker vehicles without support, marking the end of the brand’s presence on the road.
Forever 21
Forever 21 succumbed to competition from fast fashion brands, closing all 354 U.S. stores. Authentic Brands Group still holds international interests, but the company’s U.S. presence has vanished. Forever 21’s inability to adapt to changing consumer trends led to significant debt and loss of market share.
Office Depot
Office Depot faces ongoing challenges in the retail market, with potential mergers on the horizon. While not currently exploring bankruptcy, the company faces long-term demand limitations. Seasonal spikes in business, such as back-to-school shopping, provide some stability, but the future remains uncertain, especially with potential mergers and rebranding efforts involving Staples.
Big Lots
Big Lots filed for bankruptcy in late 2024, but a buyout by Gordon Brothers Retail Partners has given the brand a chance at revival. Despite plans to keep 200 locations open, the company’s future remains uncertain. The focus on pandemic-era products that have since fallen out of favor has contributed to its financial struggles.
JCPenney
JCPenney continues to reduce its physical presence, with plans to close more locations in 2025. The company is exploring partnerships to launch Catalyst Brands, yet it remains in financial distress. JCPenney’s past bankruptcy and ongoing struggles with mall traffic and competition highlight its vulnerability.
Party City
Party City announced its closure at the end of 2024, citing inflation and declining sales as key factors. The company struggled with rising internal costs and reduced consumer spending on discretionary items like party supplies. Despite efforts to restructure, Party City is set to become a memory.
The Body Shop
The Body Shop filed for bankruptcy in March 2024 in the U.S. and Canada, expanding closures to New Zealand. The brand’s reliance on mall locations and declining foot traffic have contributed to its struggles. Despite efforts to stay afloat, The Body Shop faces an uncertain future.
An additional mention: Purdue Pharma
In March 2025, Purdue Pharma filed for bankruptcy, following the Supreme Court’s rejection of a 2019 restructuring agreement that would have shielded the Sackler family from liability. The new plan includes monetary contributions from Purdue Pharma and the Sackler family, with funds allocated for victim compensation and community recovery efforts. Purdue Pharma aims to reimagine itself as a public benefit company focused on opioid use disorders.
