American fast fashion retail chain Forever 21 is reportedly preparing for a potential bankruptcy filing, after restructuring and debt restructure talks stalled.
The retailer wants to secure a potential debtor-in-possession loan to take the company into Chapter 11 bankruptcy, according to Bloomberg.
A source told the publication, a bankruptcy filing would help the company to “shed” unprofitable stores and “recapitalise” the business.
The company began talks over additional financing in June, and was working with advisers to help restructure its debt.
Forever 21 was founded in 1984 and has over 800 stores in America and worldwide. Over the past few years, the chain has closed a wave of its UK outlets including its Westfield Stratford store and in April, it was reported that it would be downsizing its UK portfolio.