// Forever 21 will close up to 350 stores across the globe
// The retailer filed for Chapter 11 bankruptcy protection in the US
Forever 21 has announced it will close up to 350 stores globally after filing for Chapter 11 bankruptcy protection in the US.
The fast fashion retailer, which has just a few stores in the UK, filed for bankruptcy thanks to the growth in online retailers such as Amazon.
Chapter 11 protection resembles a CVA in the UK, delaying a US company’s financial obligations to creditors to give it time to refinance or sell parts of the business.
Forever 21 will axe half of its store estate from around 800 around the world to between 450 and 500.
It has requested approval to close up to 178 stores in the US.
The retailer said it had obtained $275 million (£224 million) from existing lenders, in addition to $75 million (£61 million) in new capital.
Forever 21 executive vice president Linda Chang said it marked an “important and necessary step to secure the future of our company, which will enable us to reorganise our business and reposition Forever 21”.
Forever 21 has also been the centre of controversy after pop star Ariana Grande sued the company for $10 million (£8.2 million) in early September for using her trademark style to promote its products without her permission, including adverts that featured a “look-alike model”.
Meanwhile, the retailer sent out a letter on Sunday following the proceedings to reassure customers that stores were operating as usual.