Six retailers are going out of business because of Shein and Temu
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In the ever-evolving world of retail, giants don’t fall overnight, but they are falling. Shein, Temu and other online giants are driving the decline of traditional retail at an alarming rate. While economic pressures and shifting consumer tastes play a role, Shein, Temu and others have been able to capture the attention and wallets of young consumers with their low prices, rapid trend cycles and frictionless mobile experiences. Legacy brands that used to dominate malls and main street are struggling to survive as their influence grows. Some retailers relied too much on foot traffic. Some couldn’t compete against their online-only competitors because of the affordability. But the common denominator is clear: Shein and Temu are reshaping the retail economy, and not everyone is surviving the shakeup.
The Rise of Ultra-Fast, Ultra-Cheap Shopping
Shein and Temu have revolutionized the retail model by slashing prices and accelerating product cycles beyond anything traditional stores can match. Shein’s on-demand manufacturing, social media marketing and daily release of thousands of new products often for prices lower than a morning cup coffee, has revolutionized the retail model. Temu, backed by Chinese tech conglomerate PDD Holdings, uses aggressive discounts and gamified shopping tactics to draw in deal-hungry consumers.
Both platforms operate with low overhead and high-volume sales strategies. They can compete with big-box brands and malls by relying on user-generated content and cutting advertising costs. Bed Bath & Beyond
Once a popular destination for weddings, college dorms and home renovations, Bed Bath & Beyond declared bankruptcy in 2023. The final blow came from digital rivals who offered cheaper products delivered faster. Years of declining sales and supply chain problems set the scene, but mismanaged leadership was also a factor. Platforms like Temu and Shein, although not initially known for home goods, have aggressively expanded their categories, luring customers away from stores that can no longer offer the best prices or convenience.
Forever 21
Forever 21 practically invented the American fast fashion mall experience. In recent years it has found it difficult to compete with more agile and newer competitors. Shein has completely outpaced Forever 21 in its ability to quickly mirror trends and sell them at even lower prices. As Shein continues to dominate the Gen Z market, Forever 21’s relevance continues to fade, with store closures and restructuring efforts unable to keep pace with consumer flight.
Express
Express was once a staple for affordable workwear and semi-professional fashion. Express was unable to pivot fast enough as consumer preferences shifted from workwear and semi-professional fashion towards casual, ultra-affordable styles and hybrid work models. Shein’s endless list of stylish, affordable alternatives make Express appear both outdated and overpriced, especially to younger buyers who are more concerned with convenience and price than brand heritage. Temu offers extreme discounts on kids’ clothing and Shein is rapidly expanding their line of children’s apparel. The competition has become fierce. The choice for parents is becoming more and more clear when they compare a $12 shirt at a traditional retailer with a $3 shirt online. Even long-standing trust in quality can falter when budgets are tight and alternatives are just a tap away.
Rue21
Rue21’s niche was always fashion-forward styles at teen-friendly prices. Shein, however, has snagged that same demographic, offering more variety, deep discounts, and new arrivals every hour. Rue21 filed for bankruptcy again in 2024, a clear sign that even affordable legacy brands aren’t safe when up against Shein’s algorithm-driven dominance.
JCPenney
While JCPenney’s decline began long before Shein or Temu entered the U.S. market, their rise has quickened the fall. Shein and Temu offer the same convenience, variety, and affordability that JCPenney used to, but with free shipping, daily sales, and an optimized digital experience for short attention spans. Younger consumers no longer see the value in spending time in sprawling department stores when their phones offer endless, cheaper alternatives.
What the Future Holds
The success of Shein and Temu reveals not just a shift in how people shop, but in what they value: speed, price, and access. These platforms cater to the algorithmic, impulse-buying culture that is prevalent among today’s consumers. To survive, traditional retailers will need more than an online storefront. They’ll need a complete reinvention.
The collapse of once-dominant chains may seem tragic, but it’s also a warning. What can traditional retailers do to compete? What can traditional retailers do to stay competitive?
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Riley is an Arizona native with over nine years of writing experience. She has written on everything from personal finance, travel, digital marketing and pop culture. She spends her free time reading, spending time outdoors, and cuddling her two corgis.
