This move means liquidation for the company named F21 OpCo, as it was unable to find a buyer for its around 350 US stores
Amid reduced mall traffic and increasing competition from online retailers, fast-fashion retailer Forever 21’s US operating company has filed for chapter 11 bankruptcy, as per a report by Reuters. This marks the second such case in six years.
As per the report, this move means liquidation for the company named F21 OpCo, as it was unable to find a buyer for its around 350 US stores. However, the trademark and intellectual property of Forever 21, which is still held by Authentic Brands Group, may live on in a different form, the report added.
Paired with the decline of the American mega mall, the increasing popularity of ecommerce players like Amazon has impacted apparel retailers like Forever 21 and Bonobos-parent Express, which filed for bankruptcy last year, as highlighted by the report. Forever 21 was operating around 800 stores globally by 2016, with 500 of those in the United States.
The Report highlighted that the last time Forever 21 filed for chapter 11 was in 2019. Back then, it was bought out of it by Sparc, a joint venture between Authentic Brands Group and mall operators Simon Property and Brookfield Asset Management.
While the company goes through a court-supervised sale and marketing process for its assets, it plans liquidation sales at its stores. The report stated that its stores and website in US will remain open and will continue to serve the customers. In addition, the international stores will remain unaffected.
As per the report, Forever 21 is currently owned by Catalyst Brands, an entity formed on 8 January. It was formed through a merger of Sparc Group and JC Penney. As far as the assets are concerned, the reports added that the company listed its estimated assets in the range of USD 100 million to USD 500 million, as per a filing. On the other hand, the liabilities are in the range of USD 1 billion to USD 10 billion.
