Forever 21 Files for Chapter 11 Bankruptcy Protection
With the amount of money I have personally spent over the years at Forever 21, shopping with a teenage daughter, I find it somewhat hard to believe that Forever 21 has now filed for Chapter 11. This just goes to show that consumer trends continue to shift, and no one in the retail industry is immune from being captured by market forces outside their control.
We recently wrote on our blog about Fred’s Stores filing bankruptcy, and closing its stores. Forever 21 states in its initial papers that it intends to keep most US stores open. However, the First Day Declaration states a number of different reasons for the filing including online competition, decrease in mall traffic, the need to ‘right-size,’ and the never-ending need to “remain relevant.”
The Declaration pitches Forever 21 as the story of the “American Dream” and is an informative read about retail generally. (Case No. 19-12122, United States Bankruptcy Court for the District of Delaware). The Debtors have filed the normal “first day” motions including seeking approval of a store closing/lease rejection process.
Central Kentucky has seen its fair share of retail filings over the years, including the multi-location and the locally well-known and well-loved brands such as Embry’s and Dawahares. More recently, the chain of approximately 150 mattress stores with headquarters in Lexington, Innovative Mattress Solutions a/k/a Sleep Outfitters filed for bankruptcy. These cases, like so many others now, move quickly towards going-concern asset sales.
While Forever 21 operates around 550 stores in the US, the mechanics of all retail cases are similar. DelCotto Law Group has served as Debtor and Committee counsel in these local retail cases, and welcomes the opportunity to assist others in today’s competitive retail environment, both large and small businesses.
About DelCotto Law Group
DelCotto Law Group is Kentucky’s asset protection law firm known for its commitment to the lifetime success of its clients. With offices located in Lexington, Louisville and Danville, DLG serves Kentuckians with complicated financial matters, especially in the areas of bankruptcy, complex litigation, and estate planning. For more information about filing bankruptcy or DelCotto Law Group, please call (859) 231-5800, email [email protected] or reach us on our contact page.