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Forever 21 weighs bankruptcy filing



Pedestrians pass in front of a Forever 21 store in New York.

Scott Mlyn | CNBC

Apparel retailer Forever 21 is considering filing for bankruptcy as an attempt to restructure its debt, says a person familiar with CNBC's situation.

The dealership has been investigating restructuring options to strengthen liquidity while struggling with business, CNBC reported earlier. However, this effort has stopped, making a bankruptcy more likely.

It was not immediately possible to determine whether the company has begun to issue a so-called loan to the debtor that will finance a potential bankruptcy, and it is still possible that the company is able to avoid filing. Bloomberg first reported news of a potential bankruptcy filing.

Many of the most troubled retailers, such as Forever 21

, are located in malls, where fewer buyers spend their money. As sales go down, companies are still being weighed down by large, expensive store bases, though retailers need to invest in technology to stave off competition from new online-born brands, such as Lulus.

Forever 21's real estate imprint is particularly large, with more than 815 stores worldwide. Bankruptcies are a tool retailers can use to get out of unwanted leases. Resellers such as Barneys and Mattress Firm have applied for protection to reduce their footprints.

Forever 21 did not immediately respond to CNBC's request for comment.


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