Monday 21 October 2019

Troubled Forever 21 hits rails in talks with landlords

Struggling teen retailer Forever 21 has reached an impasse in talks over a restructuring deal that would give its two largest landlords a stake in the company, according to sources. Photo: Gerry Mooney
Struggling teen retailer Forever 21 has reached an impasse in talks over a restructuring deal that would give its two largest landlords a stake in the company, according to sources. Photo: Gerry Mooney

Lauren Coleman-Lochner

Struggling teen retailer Forever 21 has reached an impasse in talks over a restructuring deal that would give its two largest landlords a stake in the company, according to sources.

The breakdown in negotiations with Simon Property Group and Brookfield Property Partners means the retailer is without a reorganisation plan as it prepares for a bankruptcy filing, said the sources, asking not to be identified discussing private negotiations.

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Going to court without a plan could delay and complicate turnaround efforts.

Forever 21, with about 600 US stores, would be one of the largest retail bankruptcies yet in a year rife with them, and could leave landlords with millions of additional square feet of vacant space. US retailers have closed 8,567 stores in 2019, according to a September 27 report from Coresight Research, more than all of last year. While the parties initially discussed closing at least 100 Forever 21 locations, that number could now be higher, the sources said. Representatives for Forever 21 and Simon didn't respond to requests for comment, and Brookfield declined to comment.

Bloomberg

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