Forever 21, the clothing retailer popular in malls, will now close about 200 stores after filing for bankruptcy last month.
Previous reports said the chain would close 178 stores following the bankruptcy filing.
According to a report from CNN on Tuesday, Forever 21 will exit most international markets, including Asia, Europe, and Canada. It will focus on the United States, Mexico, and Latin America.
The locations of the stores that will be closed haven’t been provided.
In all, the chain has about 12.2 million square feet and leases almost all of its retail stores, costing $450 million per year, the news outlet also reported.
The firm has about 800 stores worldwide, with 549 in the U.S., Forbes noted.
Jim Van Horn, a bankruptcy lawyer at Barnes & Thornburg LLP, told CNN: “They will have a much lower cost structure overall, which will clearly help the bottom line.”
“Nobody can predict what’s going to happen, but they should be on firm footing for at least two or three years,” Van Horn said.
And because of the lease agreements with landlords, he said that “I do believe that there is a very good chance that Forever 21 will emerge from bankruptcy.”
In late September, the firm announced it would file for bankruptcy and shutter a number of stores.
In a statement to customers, Forever 21 said the move is necessary to take “positive steps to reorganize the business so we can return to profitability.”
“This does NOT mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future,” said a statement from executive vice president Linday Change. “Most importantly, our stores are open and it will continue to feel like a normal day – you will not see any changes in our stores, gift cards will continue to be accepted, and our policies, including returns and exchanges, remain the same.”
“As part of our filing, we have requested approval to close a number of stores across the U.S. The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords. We do however expect a significant number of these stores will remain open and operate as usual,” the company added.
Several U.S. retailers have filed for bankruptcy over the past two years, including Forever 21 and Toys ‘R’ Us.
The U.S. discount retailer in February filed for Chapter 11 bankruptcy protection for the second time, along with its North American subsidiaries. The retailer had said it would close about 2,500 stores in North America and wind down its e-commerce operations.
Toys ‘R’ Us
The toy retailer filed for Chapter 11 in September, hoping to restructure some $5 billion in debt, much of which stemmed from a $6.6 billion leveraged buyout by private equity firms in 2005. It liquidated in 2018, a blow to hundreds of toy makers that sold products to the chain, including Barbie maker Mattel Inc and rival Hasbro Inc.
The U.S. electronics chain filed for bankruptcy in March for the second time in a little over two years, faced with a challenging retail environment and an unsatisfying partnership with wireless provider Sprint Corp.
In September, the pharmacy and discount retailer said it filed for Chapter 11, months after the company began shuttering hundreds of unprofitable stores in the United States.
The children’s clothing retailer filed for bankruptcy protection in January, the second in almost two years, and said it would close more than 800 Gymboree and Crazy 8 stores.
The appliances and electronics retailer and its Gregg Appliances Inc unit filed for bankruptcy protection in March, as they continue struggling with declining sales for about the past four years.
Reuters contributed to this report.