Forever 21 is closing stores as the fast-fashion retailer's U.S. operator is considering bankruptcy, five years after the company escaped Chapter 11, according to multiple reports.

The Los Angeles, California-headquartered company, which at its peak had 500 stores, is working alongside restructuring adviser BRG to figure out ways to address its ongoing financial issues and find a buyer that could help them avoid bankruptcy, the Wall Street Journal first reported in early February, citing anonymous sources familiar with the matter. CNBC and Bloomberg also reported the chain was considering bankruptcy.

In a statement provided to USA TODAY on Wednesday evening, Forever 21's operating company, F21 OpCo, said, "Forever 21’s operating company, which is the brand licensee in the U.S., continues to explore strategic options, including a potential sale, while also reducing costs and optimizing its store footprint. The efforts are ongoing and no final decisions have been made regarding the outcome of the process or the number of stores that may be closed.”

Here's what we know about Forever 21 as it reportedly plans to close stores in a second bankruptcy process.

Is Forever 21 closing stores?

Forever 21 closures appear to be in motion already, as local news outlets in Connecticut, California and Washington state have reported locations in their states are shuttering.

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In 2020, mall owners Simon Property Group and Brookfield Corporation joined Authentic Brands Groups, a global brand development company, in buying Forever 21 out of bankruptcy and saving the retailer from liquidation. Forever 21 was among financially struggling apparel retailers − including JCPenney, Brooks Brothers and Aéropostale − that the two mall owners and Authentic Brands teamed up to acquire in recent years.

Last month, Catalyst Brands said it was "exploring strategic options for the operations of Forever 21."

USA TODAY contacted Authentic Brands and Catalyst Brands on Wednesday but has not received a response.

Forever 21 may file for bankruptcy as Temu, Shein emerge as competitors

Forever 21 has faced competition from Chinese online discount retailers Shein and Temu.

Forever 21 partnered with Shein in 2023, but the deal has only delivered modest success, Authentic Brands chief executive Jamie Salter said at a conference a year ago, according to Retail Dive. At the same conference, Salter said acquiring Forever 21 was "probably the biggest mistake I made," but he then coveted the Shein partnership as a way to turn things around, according to the retail news outlet.

Before buying Forever 21, Salter said at the conference that he "didn't see Shein" and "didn't see Temu," per Retail Dive. He and his partners decided to partner with Shein because their "supply chain is too good" and they knew they could not "beat them," the CEO said.