The US -based operator at Forever 21 is preparing to close at least 200 more locations from the rapid -fashion retailer’s shrinking stores as part of a bankruptcy process that should start next month, according to people who know the subject.
The potential plan of bankruptcy in training would seek a buyer for the retailer’s remaining stores, people said, who asked not to be identified when discussing a private issue. If no qualified buyer appears, they said Forever 21 would settle their entire chain of approximately 350 stores.
At the height, Forever 21 operated over 500 US locations and at least 800 worldwide.
“The company of Forever 21, which is the brand’s licensed in the US, continues to explore strategic options, including a possible sale, while also reduces costs and optimizes its presence in stores,” wrote a representative of the owner of Forever 21 operations , Catalyst Brands, in an email. “The efforts are underway and no final decision on the outcome of the process has been made.”
Some of the stores planned for closing have been registered for years, according to some of the people familiar with the plans. Forever 21 often reteve royalties and rent payments elsewhere to keep them working, one of the people said.
The Forever 21 brand and intellectual property are owned by the Empire of Clothing and Lifesty Style Authentic Brands, which licenses them to the operating company that would undergo a chapter 11 process.
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This company – after an acquisition in January – is a unit of Catalyst Brands, owner of JCpenney and Lucky. Previously, it was owned by Sparc Group, a joint venture formed by Authentic and Shopping Simon Property Group and Brookfield Properties, both great owners of Forever 21, to help keep the chain alive after its first bankruptcy in 2019.
Authentic’s property over the Forever 21 brand would remain intact through any bankruptcy process. Authentic plans to license the brand to other existing retailers and distributors, regardless of the result of the potential sale or settlement of the US operator in bankruptcy, said one of the people.
A authentic representative refused to comment.
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