For several months, rumors have been flying of a Forever 21 bankruptcy — with recent reports suggesting the fast-fashion retailer could be filing for Chapter 11 protection as early as Sunday.
But in a statement emailed to FN today, Forever 21 called the latest reports “inaccurate.”
“Forever 21 is not planning to file for bankruptcy on Sunday,” the company stated. “Our stores are open and it is our intention to continue to operate the vast majority of U.S. stores, as well as a smaller amount of international stores.”
An article published by The Wall Street Journal Wednesday said the retailer had plans to shutter some of its roughly 700 doors and was ready to file for Chapter 11 on Sunday.
Forever 21’s 700 stores are spread throughout the United States and internationally. The low-priced retailer was founded in 1984 in Los Angeles under the name “Fashion 21.”
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Amid continuing brick-and-mortar woes, Coresight Research estimates announced U.S. store closures could reach 12,000 by the end of 2019. Additionally, Coresight found that year-to-date closings have already topped the year total reported in 2018.
While Forever 21 may not be filing for Chapter 11 this weekend, the retailer’s debt challenges have been well documented and several of its fashion peers have already gone bankrupt this year — including Barneys New York, Payless and Charlotte Russe.
According to Coresight, there are a number of factors fueling retail bankruptcy, including the rise of e-commerce, an overabundance of U.S. brick-and-mortar stores and huge debt loads, leaving companies unable to invest in e-commerce or improve their existing locations.
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