With an offer that establishes a minimum price on the assets of the bankrupt merchant, Forever 21 Inc. came to a deal on Sunday (Feb. 2) to sell the chain of stores to a group of buyers that encompasses Brookfield Property Partners LP, Simon Property Group Inc. and Authentic Brands Group LLC for $81 million. The retailer will ask for court approval of the arrangement that will place the companies as the stalking horse or lead bidders at an auction, The Wall Street Journal reported.
The two mall owners are among the largest landlords of Forever 21. Authentic Brands, for its part, has scooped up licensing rights to many sportswear and clothing brands. The company purchased the rights to the name of Barneys in 2019 and reportedly looks to bring departments with the Barneys brand to Saks Fifth Avenue. And the founding Chang family of Forever 21 has been reportedly aiming to work with a private-equity company to place a bid.
The fast-fashion merchant, which is based in California, filed for bankruptcy last year following years of growth around the world without a clear plan on how to leave bankruptcy and restructure. A competing bidder would have to pay the merchant a fee of $4.6 million to break up. An auction will be held in February at Pachulski Stang Ziehl & Jones’s Wilmington office in the event rival bids come to fruition.
In September, news surfaced that Forever 21 had filed for Chapter 11 bankruptcy protection. The retailer said it would shutter a large number of brick-and-mortar stores around the globe per news at the time. The filing will let the retailer to continue operating while it attempts to reorganize the business and return to profitability.
At the time, it was noted that Forever 21 plans to shutter to 178 stores in the U.S., in addition to nearly all locations in Asia as well as Europe. It would keep operations in Latin America and Mexico per news at the time.
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