The American Forever 21 operator prepares to close at least 200 branches more as part of a bankruptcy process that is expected to begin next month, according to a Bloomberg News report, which cites people with knowledge of the matter.
The possible bankruptcy plan would look for a buyer for the remaining stores of the retailer, and if there is no qualified buyer, the fast fashion retailer would liquidate the entire chain of approximately 350 stores.
The company, which at its best operated more than 500 stores in the US and at least 800 worldwide, has been facing financial problems since its first bankruptcy in 2019, the specialized agency recalled.
Some of the stores that are now at risk of closing have operated with losses for years, while the company has retained rental payments and royalties to keep them afloat.
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Currently, the brand and intellectual property of Forever 21 belong to Authentic Brands, who has licensed the operations to Catalyst Brands, owner of Jcpenney and Lucky.
Previously, it was owned by SPARC Group, a joint company formed by Authentic and the owners of Simon Property Group and Brookfield Properties shopping centers, both large owners of Forever 21, to help maintain the chain after their first bankruptcy in 2019.
Authentic plans to give brand licenses to other retailers and distributors regardless of the result of the possible sale or liquidation of the US operator in case of bankruptcy, according to one of the sources of Bloomberg News.
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