Forever is undergoing corporate restructuring
According to reports, American fast fashion retailer Forever21 is hiring consultants to reorganize the company, including closing stores and seeking advice from lawyers.
Bloomberg claims that the fashion retailer is avoiding bankruptcy options and has sought guidance from legal counsel Latham & Watkins. Bloomberg calculates that Forever 21 currently has about $500 million in asset-based first-lienasset-based revolver maturing in 2022, based on data compiled by Bloomberg.
According to its website, Forever21 is the fifth largest specialty retailer in the United States and is a privately held company that opened its first store in 1984. CNBC noted that the company has a global presence It has more than 815 stores.
Forever21 spokesperson pointed out in a statement: Forever21 has cooperated with Latham and Watkins for many years, including negotiations with ABL in 2017 and many other business transactions. Our partnership with Latham is nothing new and we are continuing business as usual.
Ready-to-wear retailers continue to be driven by the global shift from physical stores to online development. Some U.S. fashion retailers have begun reducing the number of their stores in favor of their online businesses. Charlotte Russe decided to close all 416 of its stores after filing for bankruptcy.
Large fashion retailers are also affected by shifting consumer trends. Gap announced at the beginning of this year that it would close its flagship store on Fifth Avenue to eliminate a sales location that was described as a “drag on business.”
It’s not just clothing retailers that are having trouble. JCPenney, a retail giant that includes home furnishings and ready-to-wear clothing, said in June 2019 that it would close 18 directly operated stores.
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