Los Angeles: Forever 21 Inc. filed for bankruptcy protection, adding another big fashion merchant to the tally of retailers who couldn’t cope with high rents and heavy competition.
Court papers filed in the Bankruptcy Court for the District of Delaware show Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion. The Chapter 11 filing allows the Los Angeles-based company to keep operating while it works out a plan to pay its creditors and turn around the business.
Forever 21 has obtained $275 million in financing from lenders with JPMorgan, Chase & Co. as agent, as well as $75 million in new capital from TPG Sixth Street Partners and its affiliated funds. “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,” executive vice president of Forever 21, Linda Chang said in a statement.