LOS ANGELES — Forever 21, the clothes chain Of fast and economical fashions anchoring shopping malls across the USA, filed for bankruptcy protection Sunday, reports over $1 billion in obligations.
The Company, which started with one shop in the Highland Park area of Los Angeles in 1984, filed for Chapter 11 protection, permitting it to attempt to reorganize its debts and stay in business. That is less extreme than a Chapter 7 filing, that might have required the company to sell off its assets to pay its creditors.
In Documents registered in U.S. Bankruptcy Court in Wilmington, Delaware, Forever 21 Inc. said it’d obligations between $1 billion and $10 billion owed to over 100,000 creditors. It reported assets at the same $1 billion-to-$10 billion range.
The business stated in a letter to its clients that it had asked consent to close”a range of shops across the U.S.” Pending talks with landlords. It did not state how a lot of its 500 U.S. stores may close, but it sought to guarantee clients that”you won’t observe any changes within our shops, gift cards will last to be approved, and our policies, such as returns and trades, stay exactly the same.”
The New York Times noted that the firm would finish its operations in 40 countries, such as Canada and Japan, and may close as many as 350 of its over 800 stores globally.
“This was a significant and essential step to Secure the future of the firm, which will allow us to reorganize our business and reposition Forever 21,” Executive Vice President Linda Chang said in a statement Sunday night.
Permanently 21 is a virtually ubiquitous presence in American malls, which might be fighting as shoppers increasingly take their business online. Dozens of big retailers have filed for bankruptcy protection in the previous 3 decades, such as Sears, Gymboree, Claire’s, Nine West and Payless Shoe Source.
In Its announcement, Forever 21 stated it might use the insolvency proceeding”to rightsize its store base and come back to fundamentals that let the company to flourish and develop into the speedy trend pioneer “