Fashion retailer Forever 21 Inc said it has filed for Chapter 11 bankruptcy protection in the United States to restructure its business, joining a growing list of brick-and-mortar players who have taken a hit from fierce e-commerce competition.
Since the start of 2017, more than 20 US retailers, including Sears Holdings Corp and Toys ‘R’ Us, have filed for bankruptcy as more customers shift to online retailers such as Amazon Inc.
The company lists both assets and liabilities in the range of $1 billion to $10 billion, according to the court filing in the US Bankruptcy Court for the District of Delaware.
The retailer said it received $275 million in financing from its existing lenders with JPMorgan Chase Bank, NA as agent, and $75 million in new capital from TPG Sixth Street Partners, and certain of its affiliated funds.
With these funds, Forever 21 said it intends to operate business as usual and will focus on profitable core part of its operations.
The company said it plans to exit most of its international locations in Asia and Europe, but will continue operations in Mexico and Latin America.
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 the business around.
The group added that it has requested approval to close a number of its stores across the US, although the decision as to which stores will be closed are ongoing.
Founded in 1984, the retailer has 815 stores in 57 countries. Last week, it said it would exit Japan and close all 14 stores at the end of October.
