Forever 21 plans to close at least 100 bankruptcy stores

Forever 21 Inc. is preparing to close at least 100 stores as part of a restructuring that asks this fast fashion retailer to protect itself from bankruptcy as early as this month, according to people familiar with preparations.

The Los Angeles-based clothing merchant is working to secure funding that would allow him about $ 75 million for restructuring in the court process, said the public, who asked not to be named for having discussed private negotiations.

The plan contemplates a Chapter 11 filing, which would allow the company to continue operating while finding a way to pay its creditors and redress the situation. Even if these plans materialize, advisors could still enter into an agreement that would give the retailer more time to declare bankruptcy, the people said.

Founded in 1984, Forever 21 operates more than 800 stores in the United States, Europe, Asia and Latin America.

Forever 21 representatives did not comment on the preparations, but cited a statement released Wednesday by the company in response to a Wall Street Journal report that the retailer was considering filing for bankruptcy protection on Sunday.

"Forever 21 does not plan to declare bankruptcy on Sunday," the statement said. "Our stores are open and we intend to continue to operate the vast majority of US stores, as well as a small number of international stores, in order to provide customers with excellent service and an assortment of products and services. They love and expect from Forever 21.. "

The bankruptcy protection would help the garment-making business negotiate to remove unprofitable stores after a too fast and too fast expansion in recent years, said the population.

It could also put additional stress on major shopping center owners, including Simon Property Group Inc. and Brookfield Property Partners. Forever 21 is one of the largest mall tenants following a wave of bankruptcies in the retail sector, which resulted in the closure of more than 8,200 stores this year.

Owners may consider unusual ways to preserve the survival of Forever 21, people aware of the events reported last month. Owners of shopping centers and company representatives discussed the possibility of reducing the rent of Forever 21 in return for a stake in the retailer.