Forever 21 tries Chapter 11 on for size

The fast-fashion behemoth that clad a generation of teenagers has finally met its match. Forever 21[1] has filed for Chapter 11 protection, meaning it can restructure without necessarily liquidating all its assets or shuttering operations. It plans to “operate in a business as usual manner,” according to a press release. But the Los Angeles-based company reportedly plans to close up to 178 stores in the US. It owns and operates 534 domestic locations.

To support the chain’s reorganization and growth, JP Morgan[2] and TPG Sixth Street Partners[3] have contributed a combined $350 million. The funding will also help Forever 21 meet its ongoing obligations to customers, vendors and employees.

News reports of a potential bankruptcy filing by Forever 21 had circled for weeks. Unlike many of its fallen comrades in the brick-and-mortar retail meltdown, the company never dipped its hand into private equity coffers, as seen in the recent bankruptcies of Toys R Us[4], Sears[5], Payless ShoeSource[6] and others. Forever 21 has remained private and family-owned.

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