Forever 21’s US operator files for Chapter 11 bankruptcy

Fast manner marque Forever 21’s US relation and licensee F21 OpCo and its home subsidiaries person initiated voluntary Chapter 11 proceedings successful the United States Bankruptcy Court for the District of Delaware.

The institution aims for an orderly wind-down of its US operations portion seeking imaginable buyers for a going interest transaction oregon plus sale.

The retailer has made a program enactment statement with its secured lenders to facilitate an businesslike bankruptcy process. This statement is structured to expedite the company's transition done bankruptcy.

Concurrently with liquidation income astatine its stores, F21 OpCo volition prosecute successful a court-supervised merchantability and selling process for its assets.

A question volition besides beryllium filed seeking support for plus auctioning nether conception 363 of the Bankruptcy Code. A palmy merchantability mightiness let the institution to displacement from winding down to maintaining ongoing operations.

Forever 21's US-based stores and website volition proceed operating during this transition.

Meanwhile, F21 OpCo has requested "first-day" reliefs from the court, including the usage of currency collateral to support payroll, benefits anda different operational costs passim the bankruptcy.

F21 OpCo has estimated its assets successful the scope of $100m to $500m, with liabilities betwixt $1bn to $10bn, arsenic reported by Reuters.

F21 OpCo main fiscal serviceman Brad Sell stated: “Following the decision of our strategical reappraisal and aft cautious deliberation, we made the determination to record for section 11 to instrumentality a court-supervised selling process to solicit a going interest transaction, and, successful the lack of specified an arrangement, an orderly upwind down of operations.

“While we person evaluated each options to champion presumption the institution for the future, we person been incapable to find a sustainable way forward, fixed contention from overseas accelerated manner companies, which person been capable to instrumentality vantage of the de minimis [too tiny to beryllium significant] exemption to undercut our marque connected pricing and margin, arsenic good arsenic rising costs, economical challenges impacting our halfway customers, and evolving user trends.

“As we determination done the process, we volition enactment diligently to minimise the interaction connected our employees, customers, vendors and different stakeholders.”

Forever 21's planetary stores and e-commerce platforms, operated by abstracted licensees, are not affected by the US bankruptcy filings.

Authentic Brands Group retains ownership of the Forever 21 intelligence spot and whitethorn question caller licensing agreements extracurricular US operations.

"Forever 21’s US relation files for Chapter 11 bankruptcy" was primitively created and published by Retail Insight Network, a GlobalData owned brand.