Forever 21 Inc. says it is not filing for Chapter 11 bankruptcy protection this weekend. The former high-flying teen fast-fashion retailer denied a report by The Wall Street Journal that, citing unnamed sources, said Forever 21 is preparing for a bankruptcy filing as early as this weekend, with plans to close some of its 700 stores in the near future.
“The reports are inaccurate; Forever 21 is not planning to file for bankruptcy on Sunday, our stores are open and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores.”
Founded in 1984, Forever 21 has been struggling with a severe drop in traffic amid the shift to online and increased competition by the likes of H&M. The retailer operates about 815 stores in the U.S., Europe, Asia, and Latin America, with the majority in the U.S., where it is one of the biggest mall tenants. Forever 21 is Simon’s sixth-largest tenant excluding department stores, with 99 locations, according to a filing as of March 31.
On Aug. 28, Bloomberg reported that Forever 21 was preparing for a potential bankruptcy filing amid dwindling turnaround options. The retailer had brought in advisers to help restructure its debt, but negotiations with possible lenders had stalled, according to the Bloomberg report. Also in August, Forever 21 hired RCS Real Estate Advisors to help it re-evaluate its store portfolio.