Business News
Forever 21 files for bankruptcy
Washington: American fashion retailer Forever 21 has filed for bankruptcy, adding that it planned to “exit most international locations in Asia and Europe”, the media reported on Monday.
The California-based company made the announcement on Sunday night, the BBC reported.
Forbes reported that the fashion house will shut down over 100 stores.
Founded in 1984, Forever 21 sells affordable, trendy clothing and accessories. The teen apparel retailer expanded aggressively at malls across America as others pulled back.
It filed for bankruptcy on Sunday evening, according to Forbes, ending months of speculation about the state of its business by announcing. The company said it was seeking bankruptcy protection under Chapter 11.
This chapter of the code generally provides for reorganisation, usually involving a corporation or partnership.
A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11.
The fast-fashion retailer competes with other major high-street brands such as Zara and H&M.
The company said that it has obtained $275 million in financing from existing lenders and $75 million in new capital to assist with a global restructuring.
“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,” the firm’s Executive Vice President Linda Chang said in a statement.
They said that while it would cease most operations in Asia and Europe, it would continue its operations in Mexico and Latin America.
Last week, the retailer said it would pull out of Japan by October.
Forever 21, a teen apparel retailer, expanded aggressively at malls across America as others pulled back. filed for bankruptcy on Sunday evening. The retailer ended months of speculation about the state of its business by announcing that it seeking bankruptcy protection under Chapter 11.