9 Popular Retail Chains Facing Financial Ruin In 2025

The retail world is one constantly wracked by ebbs and flows. Consumers are always on the hunt for something new that solves their current set of needs. Complicating things, those needs are frequently conditioned not just by the immediate demands of life (i.e., "my shoes need replacing"), but also by larger economic trends—"will new tariffs raise the cost of new shoes too much, making it worth keeping my old pair longer?"

Consumer needs are a given, and the market has always been there to support buying decisions across both broad and niche spending areas. But the modern economic landscape has made for rough seas across plenty of industries. From hardware stores going bankrupt to immense disruptions within the fashion arena, retailers everywhere are feeling a squeeze. 2025 has started off with plenty to worry about if you're a player in this world, and that means potential hardship for consumers who rely on these kinds of outlets, too. For a variety of reasons that are specific to each of these chains' woes, a number of extremely popular companies are facing steep uphill battles or have even thrown in the towel already. Roughly halfway through 2025, things aren't looking great for each of these companies, and here's the rundown on why they're struggling.

The demise of Joann Fabric and Crafts comes as a surprise to many. The brand was a juggernaut in the craft space for generations, and was a Fortune 1000 company just a few year ago. Still, somehow the iconoclastic retailer has experienced a stunning fall from grace, losing virtually all of its value in just the last few years. Joann filed for bankruptcy last year, and then again in January 2025. The company itself notes "significant and lasting challenges in the retail environment" as the impetus for its dramatic exodus from the market. Yet, the financials paint a different picture. In 2011, Leonard Green & Partners purchased the company, bringing it under the aegis of the private equity firm's ownership. Prior to this, Joann was a publicly traded company existing in the $45 per share range and had no debt. In 2021, the company went public again to try and tamp down the roughly $1 billion in debt it had taken on through the prior decade. The stock settled at a price of around $12.

Since this time, Joann has seen profits balloon. But the debt taken on during the private equity event was seemingly too extreme for the brand of over 800 retail stores and nearly 20,000 employees to navigate. It sounds like a process out of some kind of bizzarro world, but the reality is that when private equity firms buy companies, they typically do so in a leveraged buyout, using money borrowed "on behalf of the company" itself and with its own assets used as collateral. This means that Joann, as a Leonard Green asset, owed the money used to purchase it.

It was reported by Bloomberg in February that bankruptcy proceedings might be in the wing restaurant's future. A month later, Hooters indeed initiated this trajectory (albeit, the Hooters of America brand owned by private equity, rather than all Hooters locations universally). The company's total debt load is a primary point of focus on paper, but the troubles plaguing the Hooters name appear to stem from a different problem than lax financial priorities or broad patronage declines.

Hooters was born with a specific identity. The restaurant served good wings and catered to a typified male audience looking to eat meat, drink beer, and watch sports, all while being served by good-looking women in skimpy outfits. First established in Florida's warm coastal weather, the idea caught on like a wildfire, with Hooters quickly expanding its reach and eventually numbering 420 locations across 29 countries. The appeal for these facets of the Hooters experience have fallen off, though. Social attitudes are changing, and family-oriented restaurant experiences are overtaking this sort of experience—the new vision for Hooters moving into the future looks to tone down the masculine energy, acknowledging this shift in customer priorities. The sporting environment is also something of a lackluster selling point, with more people having their own large viewing options at home to catch a game. Finally, it's been noted that other fried chicken stalwarts are improving their food, reducing Hooters' value as an ideal wing location beyond the environment. All around, Hooters looks to be a product of past sentiments that no longer holds major appeal to a broad enough spectrum of consumers.

Fisker, the EV maker, filed for bankruptcy in 2024 and has continued to field challenges in its operations in the year since. The company's bankruptcy proceedings ultimately yielded a liquidation rather than the restructuring event that its leadership was hoping to deliver. Even so, in October 2024 when the company's assets were approved for a sell off, 3,000 of its Ocean SUV models that remained in inventory were delivered to American Lease. As a result, while the company is out of business today, you can still see drivers zipping around in wholly-maintained Fiskers. That is, you could see drivers engaging with their Fisker cars as if the brand were still in business up until mid-2025. While update and technological support were guaranteed as a part of the asset sale by what was left of the Fisker brand, a partnership between American Lease and the Fisker Owner's Association broken down in May, leaving the remaining collective fleet of Fiskers on the road without critical connectivity to the system servers. The Owners Association claims that American Lease isn't holding up its end of the agreement by keeping key resources secreted away, and American Lease has highlighted problems in payments from FOA.

American Lease is a brand that leases vehicles for the purpose of ride-sharing usage, and adding what's left of the Fisker stock to its fleet has gone some distance to helping the brand achieve the fully-electric status that it's targeting for 2030. It would seem that the only Fiskers on the road will soon be those owned by the company, though, with the brand relegated almost entirely to the dust heap alongside numerous other EV retailers of late.

Competition from fast fashion brands have been a major thorn in the side of this iconic clothing retailer. Forever 21 planned to close all of its remaining stores in early 2025 and this has since come to pass for each of the company's 354 U.S. locations. Authentic Brands Group owns international interests in the company's intellectual property, however, and as of this writing Forever 21 continues to live on beyond the American market. In its filing, Forever 21 noted a dramatic shift in consumer trends that seemingly existed outside the scope of business that the company was prepared for. In short, this means that cheap, easily accessible clothing options that rival the fashion trends of more expensive retailers such as the longtime mall staple have become too agile. Forever 21 hasn't been capable of adapting its approach to meet these challenges, leaving it floundering in debt and losing too large a share of its customer base.

Authentic Brands or another last-minute investor could opt to buy out whatever is left of the company's U.S. presence to relaunch the longstanding moniker, but all signs point to an unceremonious passing. The debt load is simply too great, and if Forever 21 (officially: F21 OpCo) has its way through the remaining steps of the bankruptcy process, lenders will see a sliver of their claims satisfied (to the tune of just 3% to 6% repayment rates at most).

Office Depot perhaps isn't like the rest on this list. The company hasn't signaled that it's exploring bankruptcy options or any other avenue of restructuring. However, it has been highlighted as a brand that may continue to see struggles in the retail market. Its challenges stem specifically from long-term limitations in demand. As someone who once worked in an Office Depot store, anecdotally it would seem that there may be some truth to this assessment. Even so, Office Depot enjoys major seasonality. There's the office supply needs of local businesses and employees that trickle in throughout the year, but the close of summer is where these types of retailers see their customer number really jump. Students heading back to school need supplies by the cart load, and Office Depot's roughly 1,400 locations deliver great value and accessibility.

A different kind of threat is likely sitting on the horizon for Office Depot, though. Only a few years ago the brand finalized its long-running efforts to acquire OfficeMax (initiated in 2013), but new plans from Staples to merge with Office Depot are now in the works. The two companies attempted a merger in the '90s and were blocked by federal regulators but if approval is granted this time Office Depot stores will eventually be rebranded as Staples locations. In the process, roughly 1,000 storefronts across both brand names would fall by the wayside. Office Depot is a company that frequently posts stable financial numbers, but gives off a feeling of instability all the same. It's perhaps a product of the seasonal, low-traffic business the company finds itself occupying, and that may not change anytime soon.

The cut-price retailer Big Lots filed for bankruptcy in late 2024 and was bought out of total liquidation by Gordon Brothers Retail Partners (a retail investment firm) to start the new year. Further reporting shows that 200 locations have been flagged specifically to remain open and a deal has been struck with Variety Wholesalers to take over as many as 400 Big Lots stores. Even with the brand poised to make a comeback, the future remains murky for the wholesale retail icon, though.

The structure of Gordon Brothers' buyout was an asset-based deal and looks to leave Big Lots' debt, in particular, out of the equation. This might work out well for new ownership seeking to keep Big Lots in play, but nothing is guaranteed. The original bankruptcy deal would have seen Nexus Capital Management buy out the retailer after numerous store closures. But this deal fell through and Nexus pulled out of the arrangement just before the new year. A similar fate might ultimately be in the cards, leaving Big Lots to flounder. It's worth noting though, that part of the trouble that has plagued the low-cost outlet was a focus on furnishings and other items that people bought during the pandemic years but have moved away from since. Variety Wholesalers has historically stocked a different selection, with furniture and other items in this category taking a notable back seat.

JCPenney has been consistently reducing its physical presence in the retail world in recent years. In 2025 the store is slated to shutter eight more locations while also committing to a partnership with the similarly-struggling Forever 21 and Brooks Brothers (among others) to create a new outlet that will be known as Catalyst Brands. With all this going on, JCPenney is also operating in significant loss territory. In 2023 the outlet posted a $19 million net income while 2024 saw its fortunes dip precipitously into the red to the tune of a $64 million net loss.

In 2020, JCPenney entered a bankruptcy filing and was bought by a partnership of REIT entities that have stakes in mall real estate. Since then, the company has continued to struggle with weak traffic in the mall game and stiff competition throughout the industry. At present, JCPenney stands as one of the most financially vulnerable brands within the larger department store arena. The focus on launching Catalyst may end up paying dividends in the future, but for now it sits like an anchor around the company's neck.

At the end of 2024 it was announced that Party City would be going out of business. The closure of all roughly 700 Party City stores comes as a result of its struggle to overcome inflation, according to the company's announcement to corporate employees. Economic pressures of late, the company's CEO noted to employees that would soon be looking for new work, have come for Party City in two distinct and difficult to manage formats. Internal costs have risen on the company's backend, leading to higher outlays across the board. More pressingly, consumers have been hit hard by economic fears through a few key phases since the start of the pandemic years. A discretionary expense like party decorations and other gear typically found within these types of retail centers are a sacrifice that customers have seemingly made ahead of other expenditures. This has left Party City increasingly spending more to operate its retail locations while experiencing a steady decline in sales.

The current Party City CEO, Barry Litwin was brought on only a few months ahead of this distressing turn of events. Interestingly, Litwin joined the brand to see it through to greener pastures after exiting a previous bankruptcy filing, which was initiated in early 2023. This earlier process shed around $1 billion in debt obligations while the brand also closed nearly 100 locations in an effort to tighten up operations. These changes have fallen short though, and Party City looks destined to be a memory.

Filing for bankruptcy in March 2024 in the U.S. and Canada, The Body Shop has expanded its closure plans this year, liquidating inventory and permanently shuttering its stores in New Zealand, too. Around the time of its initial bankruptcy announcement, the company also closed almost 100 locations in the UK (while retaining 116 storefronts and staying in business there). The Body Shop closed another five locations in the UK in January 2025, and things haven't been looking up for the brand no matter where you might find it.

The trouble for this personal care brand that specialized in lotions, soaps, and other pampering and home fashion goods would appear to be its reach. In the United States, virtually all of the brand's locations were found exclusively in malls. Elsewhere — such as the UK — they took up residence in these shopping centers, too, but also made their way into town high street shopping areas, giving them a bit more exposure. Mall foot traffic has declined steadily over the last few decades, off from its peak as a place to meet friends and explore enticing shopping options in the 1980s and '90s. While malls across the United States are seeing something of a resurgence today, their positioning in the American consumer landscape still feels divorced from pop culture references like a 2006's "How I Met Your Mother" episode featuring the punchline tune "Let's Go To The Mall." eCommerce, major bankruptcies, and more have funneled shoppers toward other outlets, leaving malls in a different place within the public consciousness.

In March 2025 the pharmaceutical giant responsible for fueling the opioid crisis filed for bankruptcy. This new development has come as a result of the Supreme Court's rejection of the 2019 restructuring agreement that would have shielded the Sackler family from private responsibility in conjunction with the corporate liability. At issue was the personal shielding that these individuals would have enjoyed from the threat of future civil action. This new plan involves a nearly $1 billion monetary contribution by Purdue Pharma and up to $7 billion in settlement funds from the Sackler family directly.

Creditors—and individuals who have been harmed by the actions of the company and its familial leadership—will have the option to sign onto the settlement agreement and take their appropriate share of the funding, or reject it and opt for their own civil recourse. Roughly $850 million will be earmarked as dollars for direct victim compensation, while the majority of the money is to be taken by state and local governments and leveraged to rebuild community areas impacted by the opioid crisis. The brand itself will also seek to reimagine itself as a company aimed at delivering a public benefit rather than acting as a profit-driven enterprise. Much of the focus that it intends to place on future projects revolves around opioid use disorders.