Initially, the California-based company said it planned to close up to 178 domestic stores from a total of some 350 closures globally, but according to bankruptcy court filings, it has since amended that list to include an additional 21 locations, even its 90,000-square-foot flagship store in New York City’s Times Square.
The retailer has been negotiating its leases with landlords, and in an open letter to customers posted online in September, it said, “The decisions as to which domestic stores will be closing are ongoing, pending the outcome of [those] continued conversations.” It also said that it expected a significant number of those stores to remain open, and that it would not exit any major markets in the U.S.
On Monday, however, a bankruptcy court judge granted the company approval to begin liquidation sales at about 100 stores across the country on Nov. 1, running through Dec. 29. The list of locations includes New Jersey’s Mall at Short Hills, Manhattan’s World Trade Center shopping center and Sherman Oaks Fashion Square in Sherman Oaks, Calif. FN has reached out to Forever 21 for comment.
Currently, the company operates 549 U.S. stores and 251 in other countries. It leases 12.2 million square feet of retail space globally and spends about $450 million in annual rent. The company said it has plans to exit most of its stores in Canada, Europe and Asia, allowing it to focus on growing its business in the U.S., Mexico and Latin America.
The chain’s two biggest landlords, Simon Property Group Inc. and Brookfield Property Partners LP, have reportedly been in talks to buy a stake in the company, though no deal has been announced. In 2016, Simon partnered with mall owner General Growth Properties, now owned by Brookfield, to save teen mall chain Aeropostale from liquidation; the landlords then had more than 200 of the brand’s shops in their combined portfolio.
At the time of Forever 21’s bankruptcy filing, Simon was estimated to be owed around $8.1 million in rent from the retailer, while Brookfield had an unsecured claim of $5.3 million.
According to Coresight Research, U.S. retailers have already announced 8,993 store closures so far this year, compared with 5,844 closings in all of 2018. The advisory firm estimates the 2019 total could reach 12,000 closures by year-end.
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