Forever 21 is Considering a Bankruptcy

Popular teen fashion retailer Forever 21 is weighing a bankruptcy filing according to many reports.

According to a person who is close to the situation and spoke to CNBC, the apparel company is considering filing as its efforts to restruct debt are losing stream.

Forever 21 has been exploring restructuring options to shore up its liquidity as it struggles with its business. The retailer has 815 stores around the world in 57 countries.

A Bloomberg report has reported that with cash flow declining and turnaround plans not working, the company had reportedly sought additional financing and a debt restructuring. But those talks have stalled said Bloomberg.

Now Forever 21 is considering a debtor-in-possession loan and enter Chapter 11 reorganization.

Forever 21 has not announced any plans to close any of its over 800 locations across the U.S. yet, but closures may be expected.

“First off they lost their way on fashion — used to be really quick in copying higher end brands. They became over assorted — less impactful on fashion, while quality declined,” remarked retail analyst Janet Kloppenburg at JJK Research Associates. “Also the store footprint just kept getting larger and they have some huge 20,000-square-foot stores.”