The global fashion retailer company Forever 21 Inc. is preparing for a potential bankruptcy filing as its cash dwindles and turnaround options fade. The company has been in talks for additional financing and working with a team of advisers to help it restructure its debt, but negotiations with possible lenders have so far stalled, Livemint reported. The focus has thus shifted toward securing a potential debtor-in-possession loan to take the company into Chapter 11, even as some window remains to strike a last-minute deal that keeps it out of court, it added.
Though no such official statement from the company representatives has been found.
According to Livemint, a bankruptcy filing would help the company shed unprofitable stores and recapitalize the business, who requested anonymity discussing private negotiations. Yet it could also be problematic for the country’s major mall owners, including Simon Property Group Inc. and Brookfield Property Partners LP. Forever 21 is one of the biggest mall tenants still standing after a wave of bankruptcies in the retail sector.
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