September 30 2019

Forever 21 Files for Bankruptcy in Attempt to Restructure Business

By: BNEWS

A popular clothing store chain with a location in Burlington has filed for bankruptcy in an attempt to get back in the black. 

Forever 21, the clothing store aimed at teens and young adults, has filed for Chapter 11 bankruptcy protection, NPR reports. There is a Forever 21 location in the Burlington Mall. 

According to the report the California-based company could close as many as 178 stores but which locations are in peril has not been released. 

However, the company is stressing that it is not going out of business but simply restructuring. 

“This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” Forever 21 Executive Vice President Linda Chang said in a letter to the customers. 

To facilitate its restructuring, Forever 21 has obtained $275 million in financing from its existing lenders, the company said in the letter. With this capital, Forever 21 intends to operate in a business as usual manner, honoring all company policies, including gift cards, returns, exchanges, reimbursement and sale purchases. Forever 21 will use these proceedings to right size its store base and return to basics that allowed the company to thrive and grow into a fast fashion leader.

“The financing provided by JPMorgan and TPG Sixth Street Partners will arm Forever 21 with the capital necessary to effect critical changes in the U.S. and abroad to revitalize our brand and fuel our growth, allowing us to meet our ongoing obligations to customers, vendors and employees,” Chang said. “With support from our key landlord and vendor constituents, we are confident we will emerge as a stronger, more competitive enterprise that is better positioned to prosper for years to come, and we remain committed to delivering the fast fashion trends that our customers have come to expect from Forever 21.” 


 

 
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