The fast-fashion behemoth that clad a generation of teenagers has finally met its match. Forever 21 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 and TPG Sixth Street Partners 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, Sears, Payless ShoeSource and others. Forever 21 has remained private and family-owned.