Forever 21 looks into restructure

// Forever 21  in talks with potential lenders
// The fast fashion business is also discussing debtor-in-possession financing
// Sources say founder Do Won Chang wishes to keep control of the company

Fast fashion chain Forever 21 is thought to be in talks to plan its next steps around restructuring, with the possibility of the business seeking bankruptcy.

The US-based retailer is speaking to potential lenders and public equity firm Apollo Global Management about debtor-in-possession (DIP) financing.

DIP financing is a form of aid provided for companies in financial stress typical during restructuring under corporate bankruptcy law.

Sources close to the discussions told Bloomberg the business is looking into financing that would shore up its liquidity and ensure founder Do Won Chang maintains control of the company.

“Forever 21 is speaking with our lenders in the normal course of business and are in compliance with all of our agreements and continue to operate as usual,” the company said via email to Bloomberg. 

Just four years ago Forever 21 announced it would embark on a major international expansion adding 50 new stores it is estate in the following three years across France, Germany, Portugal, The Netherlands, Italy, Poland and Czech Republic.

Yet with its focus on fast fashion and large-format stores, Forever 21 expanded into new markets while its competitors were cutting back. 

Back in April the firm closed all of its online stores on Chinese etailers Tmall and, after shutting its operations in Taiwan in March.

Forever 21 also revealed it is considering options to downsize its business in the UK market or pulling out completely after reviewing its UK store portfolio. 

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