Fashion retailer Forever 21 went bankrupt on Sunday, joining a growing list of traditional players who have succumbed to the onslaught of e-commerce companies such as Amazon.
Since early 2017, more than 20 US retailers, including Sears Holdings Corp and Toys ‘R’ Us, have declared bankruptcy as more customers buy online and avoid large shopping centers.
Forever 21 said the restructuring will allow it to focus on the profitable central part of its operations and close some international locations.
“We request approval to close up to 178 stores in the United States.
Founded in 1984, the retailer said it has 815 stores in 57 countries.
The company plans to close most of its stores in Asia and Europe. However, he does not expect to leave any major market in the United States.
Last week, Forever 21 had said it would leave Japan and close all 14 stores at the end of October.
The company also said its Canadian subsidiary declared bankruptcy and plans to end the business, closing 44 stores in the country.
Forever 21 will continue to operate in Mexico and Latin America.
The company lists both assets and liabilities in the range of US $ 1 billion to US $ 10 billion, according to the court filing in the United States Bankruptcy Court for the District of Delaware.
The retailer said it received US $275 million in financing from its existing lenders with JPMorgan Chase Bank, NA as agent, and US $75 million in new capital from TPG Sixth Street Partners, and some of its affiliated funds.
Kirkland & Ellis LLP served as legal advisor to the company, Alvarez & Marsal advised on the restructuring, and Lazard acted as their investment banker.