Forever 21 has vowed to continue operating “the vast majority” of its US stores despite suggestions it is about to file for bankruptcy.
The fashion chain, which operates 700 stores in its homeland, is reported to be running out of cash as it battles to secure fresh funding from its lenders.
As previously reported, talks over a potential financing deal have stalled. Forever 21 is instead seeking a debtor-in-possession loan to take the company into Chapter 11 bankruptcy, according to Bloomberg.
The retailer is also in talks with landlords in a bid to renegotiate leases on more favourable rent terms, amid reports that it could file for bankruptcy as early as Sunday.
The Wall Street Journal reported that Forever 21’s most senior lender, JP Morgan Chase, has agreed to switch its loan into a bankruptcy refinancing package, which could be triggered this weekend.
But Forever 21 strenuously denied those claims. A spokeswoman said: “Forever 21 is not planning to file for bankruptcy on Sunday. Our stores are open and it is our intention to continue to operate the vast majority of US stores, as well as a smaller amount of international stores.”
The fast-fashion operator now only has a handful of stores remaining in the UK, including a flagship on London’s Oxford Street, after scaling back its presence in Britain.
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