Fashion retailer Forever 21 is preparing for a potential bankruptcy filing as their cash dwindles and turnaround options fade.
The brand has been known to be working with a team of advisers to aid with additional financing and restructuring, but the negotiations with possible lenders have so-far stalled. They are now focusing on seeking a debtor-in-possession loan to take the company into Chapter 11, they said, even as they still have a few deliverables to be covered to strike a last-minute deal that keeps it out of court.
Business of Fashion says that a bankruptcy filing would be of great help to shed unprofitable stores and recapitalize the business for the company. 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.
Forever 21 has not yet given a statement about the matter.
Photo courtesy of 11 ten official’s Instagram account
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