The retailer Fast-Fashion Forever 21 filed a request for protection against the bankruptcy of chapter 11 for the second time in six years, because it faces a decrease in trade traffic and increased competition of online platforms. The company said that it would make liquidation sales in its American stores while undergoing a sales and marketing process supervised by its assets.
Despite the deposit, Forever 21 has confirmed that its American stores, as well as its website, will remain operational, international operations not remaining affected. The retailer’s assets are estimated between $ 100 and $ 500 million, while liabilities vary from $ 5 billion to $ 5 billion, with more than 10,001 creditors involved.
Previous reports indicated that Forever 21 envisaged the closure of at least 200 additional locations as part of the bankruptcy procedure, providing for starting in March.
According to a Bloomberg report in February which cited people informed, if a qualified buyer was not found for its remaining stores, the company planned to liquidate its entire channel of around 350 stores.
The decision to potentially close these stores was influenced by years of financial loss that they have undergone, leading to hidden fees and rent payments to maintain operations. The company has also planned liquidation sales in its stores while “simultaneously leading a sales and marketing process supervised by the Court for all or part of its assets”.
In the event of a successful sale, Forever 21 said that it could move away from a complete repression of operations to facilitate a transaction in force.
