F21 OpCo, the operator of Forever 21 stores in the United States, has filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. The company, along with its U.S. subsidiaries, has entered into a Plan Support Agreement with its secured lenders to facilitate an orderly wind-down of its U.S. operations while also seeking potential buyers for some or all of its assets. The court-supervised process includes liquidation sales at its stores and an auction under Section 363 of the U.S. Bankruptcy Code. Forever 21’s stores and website will remain open as the company navigates the process, with motions filed to ensure employee wages and vendor payments continue as usual.
Chief Financial Officer Brad Sell stated that after evaluating strategic options, the company determined that a Chapter 11 filing was necessary due to competitive pressures, rising costs, and economic challenges affecting its customer base. While U.S. operations will undergo restructuring, Forever 21 stores outside the United States, which are operated by independent licensees, remain unaffected. Authentic Brands Group continues to own Forever 21’s intellectual property and may license it to other operators. The company aims to minimize disruptions to employees, customers, and vendors throughout the process.
