// Forever 21 prepares for potential Chapter 11 bankruptcy filing
// The US-based retailer has been in talks for additional financing and debt restructure negotiations have so far stalled
// Forever 21 has a handful of stores remaining the UK, including a flagship on London’s Oxford Street
Forever 21 is reportedly preparing for a potential bankruptcy filing, after talks for additional financing and debt restructure stalled.
According to Bloomberg, the US-based fashion retailer wants to secure a potential debtor-in-possession loan to take the company into Chapter 11 bankruptcy.
Forever 21 has been in talks since around June for additional financing and was working with a team of advisers to help restructure its debt.
However, negotiations with possible lenders have so far stalled, Bloomberg reported.
Despite this, there is still speculation that a last-minute deal could be reached.
Forever 21 has not yet issued a statement on the matter.
Should Forever 21 pursue Chapter 11 bankruptcy, it would allow it close unprofitable stores and recapitalise.
The insolvency procedure is similar to a CVA here in the UK.
Back in April, Forever 21 closed all of its online stores on Chinese online retailers Tmall and JD.com, and shut down its operations in Taiwan in March.
Forever 21 also revealed it was considering options to downsize its business in the UK market or pulling out completely after previously reviewing its UK store portfolio.
The fashion retailer currently operates more than 800 stores across the US, Europe, Asia and Latin America.
In the UK, it only has a handful of stores after the said review, including a flagship on London’s Oxford Street.