Forever 21 Prepares For Potential Bankruptcy

SoopremeBeing

Well-Known Member
Strange....they just opened a bunch of new stores and they had the recent Baby Phat re-launch...

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Forever 21 Inc. is preparing for a potential bankruptcy filing as the fashion retailer’s cash dwindles and turnaround options fade, according to people with knowledge of the plans.

The company has been in talks for additional financing and working with a team of advisers to help it restructure its debt, but negotiations with possible lenders have so far stalled, the people said. Focus has thus shifted toward securing a potential debtor-in-possession loan to take the company into Chapter 11, they said, even as some window remains to strike a last-minute deal that keeps it out of court.
Representatives for Forever 21 didn’t respond to a request for comment.

A bankruptcy filing would help the company shed unprofitable stores and recapitalize the business, said the people, who requested anonymity discussing private negotiations. Yet it could also be problematic for the country’s major mall owners, including Simon Property Group Inc. and Brookfield Property Partners LP. Forever 21 is one of the biggest mall tenants still standing after a wave of bankruptcies in the retail sector.

Empty Spaces
If the chain were to close a significant number of stores as part of the restructuring, its landlords could have trouble filling the vacancies. Indianapolis-based Simon counts Forever 21 as its sixth-largest tenant excluding department stores, with 99 outlets covering 1.5 million square feet, according to a filing as of March 31.

Co-founder Do Won Chang has been focused on maintaining a controlling stake in Forever 21, which has limited its fundraising options.

A faction of company officials, without the approval of Chang, had asked its biggest landlords to consider taking a stake in the retailer amid a disagreement within its leadership, Bloomberg previously reported.
 

Dposh167

Well-Known Member
This clearly is a case of bad financial management internally. Or expanding too quickly and not getting rid of poor performing stores a long time ago..etc. Their market still likes cheap clothes so it cant be people are abadoning them. I always though F21 was doing fairly well
 
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bellatiamarie

Well-Known Member
Idk.... with the fashion novas and sheins and boohoos popping up overnight I’m not surprised. Not to mention the thousands of Instagram boutiques with all this cheap tight yeast infection producing clothing that certain demographics :look: tend to be drawn to. F21 is not really dominating the market as in days past.
 

HappilyLiberal

Well-Known Member
Dress Barn is closing too. They sent my mom a 40 percent off coupon and told her the last day she can use her charge card is October 31st.
 
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