- Huw Hughes
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American fast-fashion retailer Forever 21 is reportedly mulling a
bankruptcy filing.
The company is focusing on securing a debtor-in-possession loan to take
it into Chapter 11 bankruptcy, Bloomberg reports, citing people
with knowledge of the plans. However, a potential last-minute deal is still
speculated to be a possibility.
The retailer has been in talks for additional financing and have been
working with advisors in a bid to restructure its debt, but negotiations
with potential lenders have so far stalled, the sources said.
If Forever 21 pursues Chapter 11 bankruptcy, it would be able to close
unprofitable stores and recapitalise the business, a similar process to a
company voluntary arrangement (CVA) in the UK.
In April the company announced plans to back out of the Chinese market
by closing its physical stores after having already closed its online
Chinese store.
Photo credit: Forever 21, facebook
