Los Angeles — Forever 21, Inc., and its U.S. subsidiaries have filed for voluntary Chapter 11 bankruptcy. The company’s Canadian subsidiary also has filed for bankruptcy protection. Forever 21 plans to facilitate a global restructuring that will allow it to focus on a profitable core part of its operations. As part of its restructuring strategy, the company plans to exit most of its international locations in Asia and Europe, but will continue operations in Mexico and Latin America.
“This was an important and necessary step to secure the future of our company, which will enable us to reorganize our business and reposition Forever 21,” says Linda Chang, executive vice president of Forever 21, Inc.
The company enjoys and benefits from decades-long relationships with its vendors, and dozens have already agreed to support Forever 21’s restructuring efforts. To facilitate its restructuring, Forever 21 has obtained $275 million in financing from its existing lenders with JPMorgan Chase Bank, N.A. as agent, as well as $75 million in new capital from TPG Sixth Street Partners. With this capital, Forever 21 intends to operate in a business-as-usual manners. Forever 21 will use these proceedings to right size its store base.
“The financing provided by JPMorgan and TPG Sixth Street Partners will arm Forever 21 with the capital necessary to effect critical changes in the U.S. and abroad to revitalize our brand and fuel our growth, allowing us to meet our ongoing obligations to customers, vendors and employees. With support from our key landlord and vendor constituents, we are confident we will emerge as a stronger, more competitive enterprise that is better positioned to prosper for years to come,” Chang continues.
Kirkland & Ellis LLP is serving as the company’s legal advisor, Alvarez & Marsal as its restructuring advisor, and Lazard as its investment banker.
Founded in 1984, Forever 21, Inc., headquartered in Los Angeles, is a fast fashion retailer of women’s, men’s and kids clothing and accessories. Forever 21 delivers a curated assortment of new merchandise brought in daily. For more information, visit www.forever21.com.
SOURCE: Forever 21, Inc.