Us Fast Fashion Giant Forever 21 Seeks Bankruptcy Protection And Restructuring

According to people familiar with the matter, the US fashion giant Forever 21 is weighing up the restructuring plan, hoping to increase liquidity and bring about a glimmer of opportunity for the declining business.

The company is working with investment management company Apollo Global Management to discuss DIP financing candidates for restructuring after filing for bankruptcy protection in order to get sufficient financial support, the person familiar with the matter said.

Although considering restructuring, Forever 21 still wants to guarantee the founder's control over the brand.

In addition, he also revealed that the extensive coverage of international business is a great drag on the company's day-to-day operation.

Apollo Global Management said in an email that Forever 21 had had business contacts with their investors.

In the future, Forever 21 will comply with previous agreements and continue to operate normally.

In April this year, "magnificent ambition" reported that Forever 21 had withdrawn from the Chinese market due to the adjustment of its international business strategy.

(see historical report: Forever, the fast fashion giant of the US, announced that it would withdraw from the Chinese market and close all the Chinese and offline stores). 21

Forever 21 was founded by Zhang Dongwen, a Korean American couple (Do Won Chang) and Zhang Jinshu (Jin Sook Chang) in 1984, and is headquartered in Losangeles, formerly known as Fashion 21. It was originally a clothing store with an area of only 84 square meters.

Because of its fashionable style and fast speed, it has been popular among young consumers. After a period of rapid development, it has become the fifth largest clothing retailer in the United States. Its footprint is spread over Asia, Europe and the Americas, and its business range extends from women's clothing to men's wear, ornaments, shoes and large size clothing.

The company is still privately owned by the founder family. Its annual sales in 2014 were $3 billion 800 million, and sales in 2017 were estimated to be $3 billion 400 million according to Forbes.

The instability of retail environment seems to have a huge impact on young fashion brands.

In recent years, many American youth brands have declared bankruptcy.