Forever 21 says it will not file for bankruptcy on Sunday
Despite reports that Forever 21 could file for bankruptcy, the company is knocking down such talk.
"Forever 21 is not planning to file for bankruptcy on Sunday," a spokesperson told FOX Business Wednesday. "Our stores are open and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores, providing customers with great service and the curated assortment of merchandise that they love and expect from Forever 21."
However, earlier on Wednesday, sources told The Wall Street Journal that the retail chain is could file for bankruptcy in Delaware as early as Sunday and could close more than 700 stores.
The company has been trying to save itself for months with a loan, The Journal reported.
In August, Bloomberg reported that the fashion retailer had looked into the possibility of filing for Chapter 11 bankruptcy, though there were still hopes that a deal will be made with possible financiers to save the brand, according to the outlet.
If despite its public protests, the company does file for bankruptcy, it would be able to unload unprofitable locations and renew the business, according to anonymous sources who spoke to Bloomberg.
However, it could also hurt mall owners, because Forever 21 is one of the biggest mall tenants still open as retailers continue to go bankrupt and close their doors, Forever 21 is the sixth-largest non-department store tenant to Simon Property Group, one of the largest shopping mall operators in the U.S. The retailer — owned by husband-and-wife team Do Won Chang and Jin Sook Chang, who emigrated from South Korea before starting the chain — has reportedly hired restructuring advisers to explore the chain’s options, including renegotiating leases and store exits with landlords
Simon Property Group did not immediately respond to request for comment on Sept. 11.
Forever 21 could file for bankruptcy as early as Sunday, according to The Wall Street Journal.
Many other brick-and-mortar retailers have struggled to keep their doors open in the face of online shopping.
Last month, Hudson’s Bay announced it will sell Lord & Taylor to clothing rental subscription service Le Tote for $100 million.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SPG | SIMON PROPERTY GROUP INC. | 181.80 | +0.89 | +0.49% |
| HBAYF | NO DATA AVAILABLE | - | - | - |
Le Tote will gain control over 38 Lord & Taylor stores, its online sales and all of its inventory, and the company says it plans to extend employment offers to “the vast majority” of Lord & Taylor’s workers.
Former Hudson's Bay CEO, Storch told FOX Business at the time, “Lord and Taylor, the department store as a whole, as a category, has been struggling vitally in this environment.”
The historic store's biggest liability may have been what it does not have.
“Lord and Taylor is an extreme case of a department store disease because it’s what people used to a call junior department store since it doesn’t have a home department," said Storch.
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The veteran retail executive said that today, home is one category that has held up better than apparel, therefore Lord & Taylor’s lack of home inventory can be seen as a reflection of the weakened performance in mainstream department stores overall.
FOX Business’ Jeanette Settembre and Cortney Moore contributed to this report.