Top Retail Companies That Filed for Bankruptcy in 2025

The U.S. retail sector is under immense strain. In 2024, more than 7,300 stores closed, representing an almost 58% increase from 2023, as weaker consumer spending, excess post-pandemic capacity, and high interest rates pushed vulnerable chains over the edge. The closures spanned apparel, home goods, restaurants, and discount retail, signaling broad-based stress rather than isolated failures.

So far, in 2025, the situation has only worsened. According to reports, approximately 6,000 stores have already closed in the first half of the year, putting the U.S. retail sector on pace for as many as 15,000 closures by year-end if current trends hold.

Against this backdrop, here are the major retail chains that announced bankruptcies in 2025, why they failed, how large their store footprints were before filing, and what happened next.

At Home filed for Chapter 11 bankruptcy in June 2025 as the post-pandemic home décor boom finally unraveled. The chain expanded aggressively during the stay-at-home era, loading up on debt just as consumer spending began shifting away from discretionary home goods. Rising interest rates sharply increased financing costs, while softer housing activity and a pullback in home renovation spending hurt traffic across its large-format stores. While sales did not collapse outright, the leverage built into the business left little margin for error.

Before filing, At Home operated approximately 260 warehouse-style stores across more than 40 U.S. states. Rather than liquidate, the retailer negotiated a lender-led restructuring that allowed it to exit bankruptcy in October 2025. Ownership transferred largely to its creditors, stores remained open, and the brand survived — but with significantly reduced financial flexibility and future expansion ambitions.

JoAnn Fabric’s January 2025 bankruptcy marked the second Chapter 11 filing in under twelve months, reflecting deep structural damage rather than temporary distress. The crafts retailer struggled with declining in-store traffic, rising wages, and inventory mismanagement as post-pandemic hobby spending cooled. Online marketplaces and mass merchants siphoned off customers with cheaper offerings, while JoAnn’s large physical footprint became increasingly expensive to sustain.

At the time of its second filing, JoAnn operated roughly 800 stores across the United States, most in mid-sized suburban locations. Unlike its earlier restructuring attempt, this filing ended in a full wind-down. By May 2025, stores were closed, inventory was liquidated, and the retailer exited the market entirely after more than eight decades in business.

Party City’s collapse in early 2025 followed a familiar pattern: a brief exit from bankruptcy that failed to address long-term demand erosion. The retailer suffered from declining celebration spending, reduced foot traffic, and rising freight and labor costs. Balloon margins — historically a profit driver — compressed sharply amid helium shortages and inflation, while e-commerce competitors chipped away at impulse purchases.

Before its second bankruptcy filing, Party City operated approximately 700 stores globally, including both corporate-owned and franchised locations. In early 2025, the company shut down all corporate stores, effectively ending its presence as a national brick-and-mortar retailer and closing the door on a once-dominant category specialist.

Forever 21’s March 2025 bankruptcy underscored how decisively the fast-fashion battlefield has shifted online. The brand was caught between rising operating costs and an inability to match the ultra-low pricing, speed, and digital reach of Chinese e-commerce rivals like Shein and Temu. Mall foot traffic continued to decline, and Forever 21’s historically large store sizes became liabilities rather than assets.

Before shuttering U.S. operations, Forever 21 operated roughly 500 stores across American malls, already a fraction of its global peak. Within weeks of its filing, the company closed all U.S. locations, leaving only select international operations and licensing deals intact. The bankruptcy effectively marked the end of Forever 21 as a U.S. physical retail force.

Rite Aid filed for bankruptcy in May 2025 under the weight of overlapping crises: opioid settlement liabilities, shrinking pharmacy margins, and relentless competition from CVS and Walgreens. Management had already closed hundreds of underperforming stores in prior years, but those cuts proved insufficient as reimbursement pressures and medical cost inflation intensified.

At the time of filing, Rite Aid operated approximately 1,600 stores, down from more than 4,500 a decade earlier. Most remaining locations were sold piecemeal to rivals, and by October 2025, all standalone Rite Aid stores were closed, ending one of the last remaining national pharmacy chains outside the dominant duopoly.

Bargain Hunt’s February 2025 bankruptcy highlighted the fragility of extreme-discount retail in a high-cost environment. Although discount chains typically fare better during economic downturns, Bargain Hunt was squeezed by rising rent, higher distribution costs, and inconsistent inventory sourcing. Its treasure-hunt format failed to deliver consistent foot traffic as consumers grew more price-sensitive and selective.

Before filing, Bargain Hunt operated 92 stores across roughly 10 U.S. states. The company moved straight into liquidation, closing all locations within weeks. Unlike larger discount players with scale advantages, Bargain Hunt lacked the balance sheet resilience to survive even a modest downturn.

The Container Store’s bankruptcy differed from most peers in that demand for its products did not collapse. Instead, the retailer filed due to a debt structure that became unsustainable as interest rates rose. Long-term leases and expansion costs from prior years left cash flows constrained, even as revenues remained relatively steady.

The retailer operated approximately 100 stores nationwide at the time of filing. It exited Chapter 11 quickly in January 2025 after shedding debt and transitioning to private ownership. All locations remained open, making it one of the few 2025 retail bankruptcies that functioned as a genuine financial reset rather than a prelude to closure.

Hooters filed for Chapter 11 in March 2025 after years of brand stagnation and declining casual-dining traffic. The chain struggled to modernize its concept, particularly among younger consumers, while facing rising food costs, labor shortages, and intense competition from both fast-casual chains and delivery-first dining models.

Before restructuring, Hooters operated roughly 300 restaurants globally, split between franchised and company-owned locations. The brand emerged from bankruptcy in November under a founder-backed deal aimed at restoring its original identity, trimming underperforming locations, and repositioning the chain for a narrower but more loyal customer base.

Candy Warehouse filed for Chapter 11 in October 2025, highlighting that online-only retail is not immune to financial distress. The company struggled with rising fulfillment costs, inventory financing challenges, and dependence on sharply seasonal demand peaks such as Halloween. Competition from Amazon and mass retailers further eroded pricing power.

Unlike traditional retailers, Candy Warehouse did not operate physical stores, relying instead on centralized fulfillment operations and wholesale supplier relationships. The bankruptcy case remained ongoing at year-end, with restructuring focused on debt renegotiation rather than store closures.

Del Monte Foods filed for Chapter 11 in July 2025 despite stable consumer demand for canned and shelf-stable foods. The bankruptcy was driven largely by leverage, rising commodity input costs, and logistics expenses rather than declining sales. Even categories considered recession-resistant proved vulnerable when balance sheets became overstretched.

Del Monte does not operate branded retail stores but supplies products to thousands of grocery and wholesale locations nationwide. The company secured over $900 million in debtor-in-possession financing, allowing operations to continue while it sought a buyer or long-term restructuring solution.

Hudson’s Bay Company filed for creditor protection in March 2025 as department store economics continued to deteriorate. Weak apparel demand, declining mall traffic, and high operating costs made refinancing impossible despite the brand’s historical significance.

Before closing, Hudson’s Bay operated approximately 80 department stores across Canada. By June, the company shut all locations and sold its brand name and intellectual property, ending a 355-year retail legacy and marking one of the most symbolic retail collapses of the year.

Claire’s August 2025 bankruptcy followed years of declining mall traffic and shifts in teen shopping behavior toward digital platforms. While brand awareness remained strong, profitability weakened as costs rose faster than sales.

Prior to filing, Claire’s operated roughly 2,300 stores globally, making it one of the largest specialty accessory chains in the world. The company was quickly sold to private equity, which committed to preserving most of the store base while restructuring debt behind the scenes.