In the wake of the chain’s bankruptcy this week, the Santa Barbara Forever 21 store is on the list of the Southern California venues that could face closure soon, it was learned Oct. 1.
However, that store has another three-year lease on the 901 State St. building. Even so, the store manager referred all questions to a Los Angeles public relations firm. The firm provided audio of today’s first bankruptcy hearing where the locations to close were first announced.
Among other Forever 21 stores set to close are those in Ventura at Pacific View Mall, which just opened this year, Los Angeles, Culver City, Pasadena, Valencia, Arcadia and Newport Beach. The company is said to have a “cash-flow problem.”
The Santa Barbara store is a popular mother-and-daughter shopping venue where $5 items abound and sales are frequent. Like the Santa Barbara store, most of Forever 21’s venues are some 10,000 square feet of retail.
As with most of the stores across the country, Forever 21 officials are trying to renegotiate leases with individual building owners, as is the case in Santa Barbara.
After speculation all last month, Forever 21 finally declared bankruptcy and will close up to 178 of its 549 U.S. venues. It was announced Oct. 1 that 350 of its 800 stores worldwide will be shuttered.
An earlier statement from the company said, “The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords.” The company said it expects “a significant number” of stores will remain open and operate as usual.
“This was an important and necessary step to secure the future of our company, which will enable us to reorganize our business and re-position Forever 21,” Linda Chang, executive vice president of Forever 21, Inc.
The company said it “intends to use these (Chapter 11 bankruptcy reorganization) proceedings to facilitate a global restructuring that will allow the company to focus on a profitable core part of its operations.”
As part of its restructuring strategy, Forever 21 plans to leave most of its international locations in Asia and Europe, but will continue operations in Mexico and Latin America, company officials said
The earlier announcement also said, “Forever 21 has obtained $275 million in financing from its existing lenders with JPMorgan Chase Bank, N.A. as agent, as well as $75 million in new capital from TPG Sixth Street Partners, and certain of its affiliated funds.”
With that capital, the company plans to operate in a “business as usual manner, honoring all company policies, including gift cards, returns, exchanges, reimbursement and sale purchases,” officials said. “Forever 21 will use these proceedings to right size its store base and return to basics that allowed the company to thrive and grow into the fast fashion leader.”
Founded in 1984, the privately held company is headquartered in Los Angeles. It’s known for inexpensive apparel and accessories that many moms and daughters like to shop for while strolling down commercial areas such as State Street.
Posted Sept. 30, 2019. Updated Oct. 1, 2019.