SÃO PAULO – After file for bankruptcy protection in September last year, the Forever 21 chain may have reached an agreement to sell the business to a consortium formed by Simon Property Group, Brookfield Asset Management and Authentic Brand Group. The first two are already the retailer’s largest tenants: Simon Property alone has almost 100 brand stores in its malls.
A bankruptcy court document obtained by the American press on Sunday shows the deal to be $ 81 million, a significantly low value for a company that reached $ 4.4 billion in revenue at the height of the deal.
The sale agreement is likely to close if another company does not make another offer by February 7, but it also depends on approval by the American authorities. If there are other interested parties, an auction may take place.
On the buyer’s side, it is considered that the proposal is also a way to prevent (or delay) further deterioration: if Forever 21 stores, some of the largest that occupy the mall’s corridors, close, the consequences tend to be serious.
It is worth remembering that the USA is going through a phenomenon called the Retail Apocalypse in shopping centers. A survey by Business Insider estimates that 25% of shopping centers in the country are expected to close by 2022. It is estimated that an additional 9,300 stores closed in 2019. A successful purchase from Forever could make these businesses survive.
With debts of more than $ 500 million, Forever 21 is a family business founded by immigrant couple Do Won Chang and Jin Sook Chang and today chaired by their daughter Linda Chang. Currently, the brand has more than 700 stores around the world, 540 in the USA.
When it announced the protection request, the company said it would leave some markets, such as Asia and Europe, and maintain operations in Latin America. A total of 350 units must be extinguished, 100 of which have already closed their doors. The maintenance of these plans should depend on the assessment of the buyers.
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