Mall-based fashion retailers have battled financial distress, leading to store closings and bankruptcy filings over the last year.
And the store closing trend is continuing into 2026, as e-commerce grows.
Retail chains cite many of the same reasons for their economic problems, including fierce competition and evolving consumer spending habits away from brick-and-mortar shopping to online spending. They also face rising labor and product costs driven by inflation and increased tariffs.
Major retailers that filed for bankruptcy included Forever 21, which filed for Chapter 11 on March 16, 2025, and closed down all 364 stores by May 1, 2025.
Liberated Brands, which operated a portfolio of mall brands that included Volcom, Billabong, Quiksilver, Spyder, RVCA, Roxy, Honolua, and Captain Fin, liquidated and closed all 122 of its stores at malls across the country after filing for Chapter 11 on Feb. 2, 2025, Bondoro reported.
Retail chain Claire’s filed for bankruptcy a second time on Aug. 6, 2025, sold about 950 stores to private equity firm Ames Watson, and continued operating. The bankruptcy case was confirmed in October 2025.
Major retail bankruptcies in 2025:
- Liberated Brands, Feb. 2, 2025
- Forever 21, March 16, 2025
- Claire’s, Aug. 6, 2025
Not every distressed fashion retailer needs to file for bankruptcy protection. In some cases, a retailer will close underperforming stores to cut expenses and losses with hopes of turning around the business.
Plus-sized retailer plans to shut 180 stores
That is the case for plus-sized women’s fashion retail chain Torrid, as it is expected to close dozens of stores by the end of its fourth quarter, which will conclude on Feb. 1, after shutting down 74 stores in the first three quarters of its fiscal year.
The City of Industry, Calif.-based retail chain announced in its first quarter report on June 5, 2025, that it would close up to 180 underperforming stores throughout its fiscal year, which ends in February.
Torrid could close up to 106 stores by the end of January that it had not shuttered in the first three quarters, if it follows through with its plan to close 180 stores in the 2025 fiscal year, according to a research update from S&P Global.
S&P Global downgrades Torrid
The ratings agency had revealed in the update that it downgraded the retailer to CCC+ from B- on Jan. 13.
“We now view the company’s capital structure as unsustainable, given weak credit metrics, including insufficient coverage over its interest and amortization requirements over the next 12 months,” S&P Global wrote in the update.
A Torrid spokesperson was not immediately available for comment.
Plus-sized retailer Torrid closes dozens of stores through the end of its fiscal year.
Shutterstock
Torrid closes more stores
The retail chain has been closing store locations in January, seeking to reach its 180-store goal.
The retail chain had 560 stores as of the end of the third quarter on Nov. 1, 2025. It had 634 stores when it began closing stores in its 2025 first quarter.
More closings:
- Casual Mexican restaurant chain closes more locations
- 79-year-old national trucking company closes down, no bankruptcy
- 65-year-old Home Depot rival shutters business permanently
In the first week of January 2026, Torrid revealed it would close its store in the Northwoods Mall in Peoria, Ill., before the end of the month, the Journal Star reported.
Multiple Torrid locations were set to close on Jan. 19, including the Cherry Hill Mall location in Cherry Hill, N.J., according to 42Freeway.com, and the store at the Sunrise Mall in Citrus Heights, Calif., near Sacramento, the Citrus Heights Sentinel reported.
Torrid January 2026 closings:
- Northwoods Mall in Peoria, Ill.
- Cherry Hill Mall location in Cherry Hill, N.J
- Sunrise Mall in Citrus Heights, Calif.
Torrid’s store-closing campaign and its transition to online sales are not surprising, as e-commerce transactions comprise over 60% of plus-size sales, outpacing brick-and-mortar business, according to data from Verified Market Reports, TheStreet’s Daniel Kline reported.
William Blair analysts Dylan Carden and Anna Linscott supported the chain’s plans to reduce its retail footprint and shift to digital, Retail Dive reported.
“The bigger headline here for us is that management is taking a broader cut to store closures, which we believe is a positive step in freeing up capital to invest in new product and marketing to support clear momentum in its online channel,” Carden and Linscott wrote.
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