Forever 21 could close up to 178 stores in a Chapter 11 bankruptcy filing.
The teen and young adult apparel retailer announced Sunday that it has voluntarily filed for Chapter 11 bankruptcy to restructure the company and shift focus to its profitable operations, including shedding most locations in Asia and Europe, according to a statement.
Forever 21 will continue operating in the United States, Mexico and Latin America, along with its Canadian subsidiary, but up to 178 U.S. stores could close in an effort to “right size” its store base.
The number of closures would be contingent on negotiations with landlords, but the company said it does not plan to exit any major U.S. markets and it does expect many of its more than 800 stores to remain open and operate as usual.
“This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” said Linda Chang, executive vice president of Forever 21, Inc.
Forevor 21 has obtained $275 million in financing from its existing lenders and $75 million in new capital from TPG Sixth Street Partners. The company will use the funds to operate business as usual, including accepting gift cards, returns and exchanges, according to the statement.
There are Forever 21 locations at The Greene Town Center and the Dayton Mall, as well as the Kenwood Towne Center and Florence Mall.
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