Millennials’ fast-fashion favorite Forever 21 can’t keep up with Shein’s meteoric rise: ‘It’s like comparing a mobile phone from 2000 to the newest iPhone’

Once the mall epicenter of cheap jeggings and sequined halter tops, fast-fashion brand Forever 21 is reeling from financial problems, which have only been exacerbated by the rise of e-commerce behemoths like Shein.

Forever 21 is asking some of its landlords for a break on rent—up to 50% on some of its 380 U.S. locations, people familiar with the situation told CNBC. The company filed for bankruptcy in 2019 after being unable to grow sustainably and emerged after being bought by Authentic Brands Group and landlords Simon Property Group and Brookfield Property Partners a year later, but has no plans to file for bankruptcy protections again, the people said.

Formerly a fierce competitor of mall stalwarts H&M and Zara, Forever 21 now is at risk of being gobbled up by the next generation of fast-fashion giants like Shein and Temu, which have made a name for themselves chasing trendy designs and delivering them at lightning-quick speeds to their widespread Gen Z audiences.

“The speed is almost impossible to compete with,” one source told CNBC. “So if you juxtapose any brand that was around 20 years ago to these new, on-demand manufacturing fast-fashion companies…it’s like comparing a mobile phone from 2000 to the newest iPhone. The speed, the quality, everything is just different.”

A decade ago, shoppers would be hard-pressed to believe Forever 21 would be struggling so much. Once a 900-square-foot store in Los Angeles called Fashion 21, the brand made $700,000 in sales its first year in 1985 by appealing to budget-conscious shoppers. It grew steadily for decades, and in 2015, the company’s cofounders had a combined net worth of $5.9 billion with 750 stores across the U.S. But after struggling to operate massive stores and failing to keep up with e-commerce and fashion trends, the brand stumbled. By the time it went bankrupt, its original owners lost their billionaire status.

Forever 21’s bad news comes hot on the heels of Shein’s filing for an IPO in London earlier this month. The China-based company, expected to be valued at about $63 billion, would not only give a jolt to the rapidly growing e-commerce sector, but would also be one of London’s biggest IPOs in recent memory.

Forever 21’s new owner already conceded to the negative impact online fast-fashion marketplaces would have on the retailer. Authentic Brands CEO Jamie Salter said in January that the consortium’s 2020 acquisition of Forever 21 was “probably the biggest mistake I made,” in part because he didn’t recognize the immensity of the threat of Shein and Temu.

Forever is finite

But the relationship between Forever 21 and Shein is more than just adversarial—the two businesses are deeply intertwined. Shein announced in August it acquired one-third of fashion ownership group SPARC, the consortium of Authentic Brands and Simon Property that owns Forever 21. The partnership allowed for Shein to host pop-ups at Forever 21 locations and for the two companies to launch a collaborative clothing line. In May, Shein announced plans for its customers to be able to return orders at over 300 Forever 21 locations through its partnership with Happy Returns. Not only did the relationship help give Shein visibility to jump-start its budding U.S. popularity, but it also helped breathe new life into the ailing Forever 21.

“Being partners with Shein for the last four months: It’s early. We’re dating right now,” Salter said during a presentation in January. “It’s been incredible; the pop-ups have been huge home runs.”

While that relationship appeared to be mutually beneficial as recently as this year, with the mall retailer’s seemingly downward trajectory, the partnership may not hold fast, according to Peter Cohan, associate professor of management practice at Babson College.

“The value of that business to Shein, as an owner of a third of the parent company, might not be so compelling as it was a few years ago,” he told Fortune.

He could see Shein letting the option to continue its in-store partnerships with Forever 21 essentially fizzle out and expire, particularly as it looks to cash out overseas. As for the future of Forever 21? It may depend on the finances of Simon Property Group, Cohan argued. The group, which owns several mall stores, has recently had stock underperform compared to competitors and last month sold its 10% stake in Authentic Brands for almost $1.2 billion. Both groups still have their joint venture SPARC, however. SPARC, Authentic Brands, Simon Property, Shein, and Forever 21 did not immediately respond to Fortune’s requests for comment.

While Forever 21’s decision to pursue bankruptcy for a second time may hinge on the financial health of its ownership, Cohan is still not optimistic on the future of the brand: “That company does not sound like it's going to be around that much longer,” he said.

This story was originally featured on Fortune.com