Forever 21 plans to close about 60 fewer stores after rent cuts - Hindustan Times
close_game
close_game

Forever 21 plans to close about 60 fewer stores after rent cuts

Bloomberg | ByEliza Ronalds-Hannon and Lauren Coleman-Lochner
Nov 01, 2019 08:56 AM IST

Forever 21 is now targeting about 111 closures, one of the people said, asking not to be identified because the negotiations are private. The ultimate number is still in flux, and the final count could change, said the people.

Forever 21 Inc. will keep open more than 60 US stores previously set to shutter as part of the company’s bankruptcy restructuring after the retailer secured rent concessions from its biggest landlords, according to people with knowledge of the situation.

Forever 21 is now targeting about 111 closures, one of the people said, asking not to be identified because the negotiations are private.(Pradeep Gaur/Mint File Photo)
Forever 21 is now targeting about 111 closures, one of the people said, asking not to be identified because the negotiations are private.(Pradeep Gaur/Mint File Photo)

It’s an early win for the fast-fashion company after it filed for Chapter 11 protection in September as talks with mall operators about a possible rescue broke down. The company had no plan for reorganization when it filed, and said it would close at least 178 U.S. stores and dozens more internationally as it worked toward a turnaround.

Hindustan Times - your fastest source for breaking news! Read now.

Forever 21 is now targeting about 111 closures, one of the people said, asking not to be identified because the negotiations are private. The ultimate number is still in flux, and the final count could change, said the people.

“Forever 21 was a top-10 tenant for most of the retail REITs we cover, so the landlords have been willing to be flexible about cutting deals,” said Jim Sullivan, an equity research analyst at BTIG who follows the commercial property industry.

A representative for the retailer declined to comment.

The company cited a disastrous international expansion effort as the primary factor behind its bankruptcy, saying in court documents that it was losing $10 million a month in Canada, Europe and Asia.

It also said moving quickly would be critical to a successful turnaround. Still, the company has offered no updates and hasn’t returned to court since its first-day hearing on Sept. 30. A subsequent hearing set for October 28 was cancelled.

While Forever 21 continues to seek ways to shed costs, the chain may need more than rent concessions to survive. It owed $244 million to vendors and millions of dollars more to landlords at the time of its Chapter 11 filing. It received only $75 million in new money as part of a financing package to take it through the court process, according to documents.

The case is Forever 21 Inc., 19-12122, District of Delaware (Delaware)

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On