American fashion chain Forever 21 has filed for bankruptcy protection under the 'Chapter 11' procedure. This will ensure the company is protected from creditors and can undertake a restructuring.
The move is no surprise at all: 'chapter 11' allows a company to continue its activities, while at the same time working on a debt reduction plan. For example: under this procedure, it will be much easier for the company to close unprofitable stores and carry out a major restructure.
According to Reuters, the chain has plans to close 178 stores in the United States. In addition, almost all European and Asian stores are to close. The company currently has 815 stores in 57 countries.
To help the company get back on its feet, Forever received 21 new loans from the banks - totalling 275 million dollars (250 million euros). In addition, TPG Sixth Street Partners is making a capital injection of 75 million dollars (68 million euros).
Forever 21 no longer has any branches in Belgium, as these have already been closed. In the Netherlands, the fashion company has one store in Rotterdam.