RiverNorthPhotography/iStock(LOS ANGELES) — Forever 21 has filed for Chapter 11 bankruptcy protection.
In a letter to customers Sunday night, the Los Angeles-based retailer said the move allows the company to “continue to operate its stores as usual, while the Company takes positive steps to reorganize the business so we can return to profitability and refocus on delivering incredible styles and fashion you love for many years to come.”
“This does NOT mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future,” the company noted.
To help with its restructuring efforts, Forever 21 says it has obtained $275 million in financing from its existing lenders with JPMorgan Chase Bank and $75 million in new capital from TPG Sixth Street Partners.
With this funding, Forever 21 hopes to continue running its business as usual.
“[O]ur stores are open and it will continue to feel like a normal day – you will not see any changes in our stores, gift cards will continue to be accepted, and our policies, including returns and exchanges, remain the same,” the retailer assured customers in its letter.
The company did note, however, that as part of seeking bankruptcy protection, it has requested to shut down a couple of its stores in the U.S.
Forever 21 did not specify how many stores it will be closing and said “the decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords.”
“We do however expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.,” the retailer added.
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