Forever 21 is reportedly considering filing for bankruptcy as sales decline, sources with knowledge of the plans have told Bloomberg and CNBC. The fast fashion retailer was already negotiating additional financing options and working with advisors to restructure the company’s debt, but those discussions have stalled, according to Bloomberg.
Weeks ago, the outlet reported that Forever 21—which makes an estimated $3 billion per year in sales—was struggling to pay vendors and landlords and was seeking out ways to “revive its business.” By filing for bankruptcy, the brand may be able to “shed unprofitable stores and recapitalize the business,” Bloomberg reports, citing anonymous sources familiar with the negotiations.
WEAR NOW & LATER | stock up on outfit staples to transition into the new season 🍂 — Search: 00369001 (tap to shop)
A post shared by forever21 (@forever21) on
At the time of writing, Forever 21 has not announced any plans to close any of its over 800 locations across the U.S. However, as CNBC points out, many of its branches are located in malls, which are seeing fewer shoppers. Similar fast fashion brick-and-mortars are also fighting (and, at times, failing) to keep up with online and or direct-to-consumer brands. The U.K.-based brand TopShop, for example, also recently filed for bankruptcy and closed all of its U.S. stores as a result.
The L.A. Times also projected that Forever 21 lost its “cool factor” and had widened its range of merchandise too broadly. “They’ve lost sight of what brought them there,” Roger Beahm, executive director of the Center for Retail Innovation at Wake Forest University, told the paper in July.
Source: Read Full Article