Forever 21 prepares for possible bankruptcy filing
Retailer Forever 21 is considering filing for bankruptcy as efforts to find additional financing have stalled and the firm is struggling to clinch a potential debtor-in possession loan.
Sources familiar with the situation told Bloomberg that a bankruptcy filing would help the company shed unprofitable stores and recapitalise the business.
Many of its 815 shops could close by the end of the year and their landlords might have trouble filling the vacancies.
Mall owners that lease the spaces such as Simon Property Group (99 Forever 21 stores in the US) and Brookfield Property Partners would be especially affected by the closures.
Forever 21 is not the only US retailer that is struggling, with many located in malls are also feeling the effect of shoppers' ongoing shift towards spending less money in physical stores.
And with the costs of the stores becoming too high to pay, many companies were increasingly deciding to invest in technology and digital sales themselves in order to better compete against their increasingly popular e-commerce rivals.