Published 6:08 PM EDT Sep 11, 2019
While reports are circulating that Forever 21 Inc. could file for Chapter 11 bankruptcy protection as early as Sunday, the fashion retailer told USA TODAY that’s not the case.
“The reports are inaccurate; Forever 21 is not planning to file for bankruptcy on Sunday,” the company said in a statement. “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.”
On Wednesday, the Wall Street Journal reported, citing unidentified people said to be familiar with the plans, that the company was expected to file for bankruptcy and was looking to close some of its 700 stores.
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Filing for Chapter 11 bankruptcy protection often involves some store closures as retailers look to break leases on money-losing stores and slash loans. The goal is typically to create a reorganized, often smaller company that can get a new start.
According to a recent Bloomberg story, Forever 21 hired a team of advisers to help restructure its debt and has been in talks for additional financing, but negotiations with possible lenders have stalled.
There has been a wave of recent bankruptcies and store closing announcements.
Nine months into 2019, there have already been 40% more store closings announced than in all of 2018, according to a new report from global marketing research firm Coresight Research.
Based on Coresight Research’s figures, retailers’ earnings reports, bankruptcy filings and other records, more than 8,200 stores are slated to shutter this year and thousands of locations already gone.
Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko