Forever 21 filed for bankruptcy protection on Sunday (March 16) for the second time in six years and is reportedly expected to close all 350 of its U.S. stores, CNBC reports.

The clothing retailer had sought a buyer for several months and contacted more than 200 potential buyers, which included 30 signed confidentiality agreements, but failed to reach a deal, according to court documents. Forever 21's operating company is expected to begin liquidation sales as it begins to cease all operations nationwide.

CNBC previously reported that its operating company had discussions with liquidators and would face difficulties in finding a buyer. The company had previously filed for bankruptcy prior to the COVID-19 pandemic, as well as the highest inflation facing American consumers in decades as new competition such as Chinese-founded Shein and Temu offered discounted prices.

Stephen Coulombe, the operating company's co-chief restructuring officer, claimed Forever 21 was "materially and negatively" impacted by the success of Shein and Temu as they "undercut" its business by using the de minimis exemption, a trade law loophole that allows goods valued under $800 to be shipped to the U,.S. without import duties.

“Certain non-U.S. online retailers that compete with the Debtors, such as Temu and Shein, have taken advantage of this exemption and, therefore, have been able to pass significant savings onto consumers,” Coulombe wrote via CNBC. “Consequently, retailers that must pay duties and tariffs to purchase product for their stores and warehouses in the United States, such as the Company, have been undercut.”

“Despite wide-spread calls from U.S. companies and industry groups for the U.S. government to create a level playing field for U.S. retailers by closing the exemption, U.S. laws and policies have not solved the problem,” he added.