6 Retailers That Are Going Out Of Business Because of Shein and Temu

The Fast-Fashion Disruption: How Shein and Temu Are Rewriting Retail

The emergence of ultra-fast fashion retailers like Shein and Temu has profoundly disrupted the traditional retail sector. These online powerhouses, known for delivering thousands of trend-driven items at breakneck speed and extremely low prices, have seized the attention of consumers globally. Their ascendancy has not only transformed fashion consumption but also placed considerable pressure on long-standing retail giants struggling to keep pace.

Retailers that once dominated shopping malls and high streets are now fighting to survive amid declining foot traffic, thinning profit margins, and shifting consumer expectations. The following retailers exemplify the growing list of casualties in this rapidly changing retail climate.

6 Retailers Struggling Under the Weight of Shein and Temu’s Dominance

JCPenney – A Legacy Brand on Life Support

JCPenney, a cornerstone of American department stores for over a century, has witnessed a steep decline in recent years. Beset by years of mismanagement and failed reinventions, the brand now finds itself overwhelmed by the speed and pricing agility of online rivals like Shein and Temu.

The challenge lies in JCPenney’s inability to compete with the product variety and trend responsiveness offered by these digital-first players. Traditional seasonal inventory cycles have proven sluggish and expensive, leaving JCPenney unable to satisfy the demand for constantly changing styles at bargain prices.

Macy’s – Downsizing to Survive

Macy’s, long known for its expansive in-store experiences, has begun shuttering locations and consolidating operations. The retailer’s brick-and-mortar model has struggled to resonate with younger shoppers gravitating toward fast fashion platforms that offer convenience, affordability, and ceaseless novelty.

Despite attempts to modernize through digital expansion and store-in-store strategies, Macy’s has been unable to match the pricing model of Shein and Temu, whose operations hinge on low-overhead logistics and volume-driven sales.

Express – Filing for Bankruptcy

Express, once a staple for millennial workwear and weekend fashion, recently filed for Chapter 11 bankruptcy. The brand’s target demographic has increasingly drifted toward cheaper and trendier alternatives online, a shift largely attributed to the rise of Shein and Temu.

With a pricing structure that could not undercut these fast-fashion disruptors and an e-commerce presence that failed to capture significant market share, Express succumbed to both falling revenues and waning brand relevance.

Rue21 – An Attempt to Restructure Amid Heavy Losses

Rue21 has faced repeated financial challenges and store closures over the past decade. The chain, which targets a youthful demographic, found itself squeezed out of the market as Gen Z shoppers pivoted en masse toward Shein and Temu, attracted by their low prices and frequent style refreshes.

While Rue21 has attempted digital transformation and promotional pricing, it has struggled to achieve the operational efficiency and global scale required to compete with its online-only competitors.

The Children’s Place – A Shrinking Footprint

The Children’s Place has reported falling revenues and is closing hundreds of stores. Although the brand holds a unique niche in children’s apparel, the affordability of Temu—especially among price-conscious families—has encroached upon its core market.

Combined with rising operational costs and the demands of maintaining physical stores, The Children’s Place faces significant headwinds as consumer loyalty erodes in favor of inexpensive, online alternatives.

Forever 21 – Losing Ground in Its Own Arena

Once a leader in fast fashion itself, Forever 21 has seen its dominance wane significantly. While the brand pioneered rapid-style cycles during the 2000s, its decline was hastened by a failure to modernize its supply chain and digital infrastructure.

Now, Forever 21 finds itself outpaced by Shein’s algorithmic trend forecasting and Temu’s marketplace-style model. The brand’s 2019 bankruptcy filing marked the start of its decline, and recent efforts at revival have yet to match the scale or innovation of newer competitors.

The Mechanics Behind the Collapse

The downfall of these retailers cannot be attributed to a single cause, but the competitive pressure from Shein and Temu has acted as a powerful accelerant. Their disruptive models expose the vulnerabilities in legacy retail structures, including:

• Slower Turnaround Times
  Traditional retailers often take months to bring new designs to shelves, while Shein can execute this process in days.
• Price Discrepancies
  Deep discounts and flash sales from Shein and Temu continually undercut the fixed pricing models of established brands.
• Digital Advantage
  Both platforms utilize real-time data, app gamification, and personalized recommendations to maximize user engagement and sales conversion.
• Global Fulfillment Networks
  By leveraging low-cost overseas manufacturing and direct-to-consumer logistics, Shein and Temu bypass many of the supply chain limitations that burden conventional retailers.

Changing Consumer Preferences Are Reshaping the Market

A generational shift in shopping behavior has contributed to the challenges facing traditional retailers. Today’s consumers are less focused on brand loyalty and more driven by price, immediacy, and trend relevance.

• Affordability Trumps Heritage
  Consumers increasingly value a $5 blouse that arrives in three days over a premium-priced garment backed by decades of brand recognition.
• Novelty Over Quality
  The desire for frequent wardrobe updates encourages rapid consumption, discouraging long-term investments in apparel.
• E-commerce as Default
  Digital platforms have become the first stop for fashion shoppers, offering a user experience that brick-and-mortar stores struggle to replicate.

What Retailers Can Learn from These Failures

While many established brands are faltering, the situation is not beyond remedy. Those seeking to remain relevant must consider transformative strategies that align with modern retail dynamics:

• Streamline Operations
  Reducing supply chain friction and improving time-to-market is essential to compete with rapid-turnover rivals.
• Enhance Digital Integration
  Investing in immersive e-commerce experiences, AI-powered product discovery, and app functionality can close the engagement gap.
• Diversify Pricing and Product Strategy
  Introducing capsule collections, limited runs, or competitive price segments may appeal to fast-fashion shoppers without diluting brand value.
• Elevate Brand Purpose
  Positioning around sustainability, inclusivity, or ethical labor can resonate with socially conscious consumers increasingly wary of mass production excesses.

The Path Ahead for the Retail Industry

The rise of Shein and Temu marks a turning point in retail. Their influence reveals a demand for fast, affordable, and personalized fashion that legacy retailers failed to anticipate. Brands that continue to cling to outdated models will likely face store closures, revenue loss, or total obsolescence.

However, those that embrace innovation, challenge tradition, and respond nimbly to evolving consumer values still have a path to relevance. The transformation will require bold investment and strategic reinvention—not simply survival tactics.

Reviewed and edited by Albert Fang.

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Article Title: 6 Retailers That Are Going Out Of Business Because of Shein and Temu

https://fangwallet.com/2025/04/21/retail-store-closures/

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