Forever 21 weighing up restructuring options
today Jun 5, 2019
Los Angeles-based fast fashion retailer Forever 21 Inc. is reportedly exploring restructuring options with potential lenders and advisers as it attempts to turn around its struggling business.
According to a Bloomberg report that cites people familiar with the matter, the company is looking into financing options that would allow it to bolster its liquidity and maintain founder Do Won Chang’s control of the business.
The retailer is also reportedly in talks with public equity firm Apollo Global Management, discussing the possibility of debtor-in-possession financing in the case that it were to seek bankruptcy.
The source, however, was eager to stress that no definitive decisions have yet been made with regards to the company’s potential restructuring.
As for the company itself, it’s playing its cards close to its chest, telling Bloomberg on Monday, “Forever 21 is speaking with our lenders in the normal course of business and are in compliance with all of our agreements and continue to operate as usual.”
As a private company, Forever 21 does not publish its financials but, along with other brick-and-mortar-focused retailers, the chain has been under increasing pressure from digital competitors such as Lulus, Boohoo and Fashion Nova.
In the past few years, a number of fashion retailers targeting a similar youth demographic – such as American Apparel and Rue21 – have already had to declare bankruptcy.
Forever 21, which currently operates more than 815 stores worldwide, shuttered its French business in January of this year and recently pulled out of China, the latest in a list of fashion retail chains to call an end to their operations in the Middle Kingdom in recent months, including New Look, Topshop, and Asos.
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