Four months after filing for bankruptcy, Forever 21 has reached a deal to sell its business.
Court documents filed on Sunday show that the fast-fashion retailer entered into an agreement to sell off its assets for $81.1 million to a consortium of buyers, including mall owners Simon Property Group and Brookfield Property Partners as well as brand management firm Authentic Brands Group.
According to the filing, Forever 21 is seeking a judge’s approval to name the three companies as the stalking-horse bidders. Other parties have until Friday to make counteroffers, with an auction to be held on Feb. 10 if a higher bid is submitted. A sale hearing is scheduled on Feb. 11.
“Once approved, the agreement will allow Forever 21 to come out of bankruptcy, keeping its headquarters, stores and e-commerce operations open, providing fashions and trends that customers know and love for years to come,” the retailer wrote in a statement.
FN has also reached out to ABG, Simon Property Group and Brookfield Property Partners.
Amid shrinking sales and declining foot traffic, California-based Forever 21 filed for bankruptcy in late September with intentions to restructure and focus on the profitable core part of its operations. FN learned in November that Forever 21 will close 111 domestic stores but keep open its outposts in Mexico and Latin America.
Forever 21 is supported by $350 million in financing to aid in restructuring efforts. Its bankruptcy comes at a time when a shift to e-commerce and broader brick-and-mortar downsizing have led to the downfall of many physical retail players. It also joined the swelling list of companies, including, more recently, Barneys New York, that used Chapter 11 protection in the hopes of rightsizing their store fleet and overhauling their business strategies.
In November, ABG and investment banking firm B. Riley Financial closed the deal to purchase Barneys’ intellectual property. As part of the transaction, ABG said it would transform Barneys’ nearly century-old flagship location on New York City’s Madison Avenue into a pop-up retail store.
Simon Property Group and Brookfield Property Partners, on the other hand, are two of Forever 21’s biggest landlords. In 2016, Simon partnered with mall owner General Growth Properties — now owned by Brookfield — to save teen mall staple Aeropostale from liquidation; the landlords then had more than 200 of the brand’s shops in their combined portfolio.
This story was updated with Forever 21’s statement.
Forever 21 to Reportedly Save About 60 Stores Slated for Closing
Amid Forever 21 Bankruptcy, Rival H&M Overcomes Two-Year Earnings Slump
After Forever 21, What’s the Next Teen Mall Staple?