Struggling teen retailer Forever 21 Inc. has reached an impasse in talks over a restructuring deal that would give its two largest landlords a stake in the company, according to people with knowledge of the situation.
Forever 21, with about 600 U.S. stores, would be one of the largest retail bankruptcies yet in a year rife with them, and could leave landlords with millions of additional square feet of vacant space. U.S. retailers have closed 8,567 stores in 2019, according to a Sept. 27 report from Coresight Research, more than all of last year. While the parties initially discussed closing at least 100 Forever 21 locations, that number could now be higher, the people said.
Forever 21 was aiming to file for bankruptcy with an agreement in place to give its landlords a stake in the company while allowing co-founder Do Won Chang to retain a share, Bloomberg earlier reported. Negotiations with the mall operators have included questions over ownership and leadership of the company during and after its restructuring, as well as which stores to shutter.
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