Fashion retailer files for Chapter 11 bankruptcy
Fashion retailer Forever 21, which opened its first European store in Birmingham’s Bullring and has a store on Liverpool’s busy Whitechapel shopping district, has filed for Chapter 11 bankruptcy protection in the US.
The company announced plans to exit most international locations in Asia and Europe although it said it would continue to operate in Mexico and Latin America.
It expects to close up to 350 stores worldwide.
Chapter 11 protection postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.
Forever 21 expects to have between 450 and 500 stores globally after this process, down from around 800 currently in operation.
The California-based firm said it has requested the approval to close up to 178 stores across the US.
“Decisions as to which international locations will be closing are ongoing. We do not expect to exit any major markets in the US,” the company said.
“This does not mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future,” the company said.
As part of the Chapter 11 proceedings, the firm said it has obtained $275m (£224m) in financing from existing lenders and $75m in new capital.
