Fashion retailer Forever 21 has filed for bankruptcy under Chapter 11 as it joins a growing list of bricks-and-mortar outlets who are failing to compete with giant online retailers such as Amazon.
More than 20 US retailers have filed for bankruptcy since the start of 2017, including Sears Holdings Corp and Toys ‘R’ Us.
Forever 21 said it received $275m (€252m) from existing lenders as financing while JPMorgan Chase acted as its agent. It also received $75m (€68.7m) in new capital from TPG Sixth Street Partners.
Last week, the fashion retailer said it would exit the Japanese market and close all 14 of its stores at the end of October. Forever 21 reportedly plans to exit all Asian and European markets, but will retain stores in Mexico and Latin America.
With funding received, the retailer said it plans to operate business as usual in the markets it is retaining a presence, and will focus on the profitable core part of its operations.
It was founded in 1984 and currently has 815 stores in 57 countries.
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In addition, the Miss Selfridge chain has posted a £17.5m (€19.7m) loss for 2018. This is attributed to a loss of sales while the chain also wrote down the value of loss-making stores.
The Guardian reports that sales fell by more than 15 per cent to £102m in the financial year ending 1st September 2018, with pre-tax losses having more than quadrupled when compared with the previous year.
Staffing at Miss Selfridge has since experienced further cuts, while the company has closed its flagship store on Oxford Street. The move comes as part of Sir Philip Green’s Arcadia Group, which also owns Topshop, Dorothy Perkins and Burton.