Los Angeles-based fast fashion retailer F21 Opco, the licensee of Forever 21 in the U.S., said it will wind down its U.S. businesses while pursuing a going concern transaction or a sale of some or all of its assets. The company has filed for Chapter 11 protection in U.S. Bankruptcy Court for the District of Delaware, its second filing in six years.

“While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends,” said F21 OpCo CFO Brad Sell. “As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”

All stores will remain open while the bankruptcy process runs its course. In the event of a successful sale, the company may pivot away from a full wind-down of operations to facilitate a going-concern transaction.

The Chapter 11 filing does not affect Forever 21 stores outside the U.S., which are operated by other licensees. Additional information about bankruptcy proceedings may be accessed here.

Nine months after emerging from bankruptcy, retailer Joann Inc. has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware to facilitate a sale process to maximize the value of its business. The Hudson, OH-based company is seeking court approval to commence a process for the sale of substantially all its assets, with Gordon Brothers Retail Partners, LLC serving as the “stalking horse” bidder.

“Since becoming a private company in April, the board and management team have continued to execute on top- and bottom-line initiatives to manage costs and drive value,” said Michael Prendergast, interim CEO of Joann. “However, the past several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step.”

If other qualified bids are submitted during the court-supervised sale processes, the company plans to conduct an auction or auctions, with the stalking horse bid setting the floor.   

Kirkland & Ellis is serving as legal counsel to Joann, with Centerview Partners LLC serving as financial advisor and Alvarez & Marsal North America, LLC serving as restructuring advisor. The company operates more than 800 stores across 49 states. 

Express, Inc. said Monday it had filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the District of Delaware and will close approximately 95 Express stores and all 12 UpWest locations. The Columbus, OH-based retailer has received a non-binding letter of intent from a consortium led by WHP Global to acquire a substantial majority of its stores and operations.

Subject to court approval, Express has received a commitment for $35 million in new financing from certain of its existing lenders. Last week it received $49 million in cash from the Internal Revenue Service related to the CARES Act.

The bankruptcy filing had been expected, with news surfacing earlier this month that the 44-year-old retailer was exploring Chapter 11 protection. “With the company struggling to gain traction with consumers, it has been obvious for quite some time that bankruptcy was the inevitable destination for Express,” Neil Saunders, managing director of GlobalData, was quoted by CNN as saying.

WHP Global’s partners in the consortium include a wholly owned indirect subsidiary of Simon Property Group, L. P. and Brookfield Properties. New York-based WHP already owns a 7.4% stake in Express.

“WHP has been a strong partner to the company since 2023, and the proposed transaction will provide us additional financial resources, better position the business for profitable growth and maximize value for our stakeholders,” said Express CEO Stewart Glendinning.

The company didn’t specify which Express locations would close down. Currently it operates about 530 stores under the Express, Bonobos and UpWest brands.

Kirkland & Ellis LLP is serving as legal counsel to Express, Moelis & Company LLC is serving as investment banker, and M3 Partners, LP is serving as financial advisor. Information about the company’s court filings is available here.

Pictured: Express storefront in Manhattan’s Flatiron District, circa 2013.

Cambridge Realty Capital Companies arranged a $5,950,000 conventional loan to acquire Twilight Haven Senior Living, located in Fresno. Brent Holman-Gomez, SVP at Cambridge, lined up the fully-amortized, 25-year loan for the buyer, a California limited liability company. Underwriting the transaction was a Utah-based industrial bank.

Twilight Haven comprises 60 independent living units, as well as 116 assisted living beds and 50 skilled nursing care beds. The assisted living business is focused on the Medi-Cal Assisted Living Waiver program.

Holman-Gomez said the acquisition was an opportunistic major turnaround for the nonprofit seller to the for-profit buyer. “The selling operator was in bankruptcy and the skilled nursing facility was closed,” he said. “Given the troubled asset and current credit markets, this was a remarkably high loan-to-cost ratio within traditional norms, allowing the borrower to grow their business while limiting cash to close.”

Atlanta-based hamburger chain Krystal has filed for Chapter 11 Bankruptcy. The company reported assets between $10 million and $50 million, and liabilities between $50 million and $100 million.

The fast-food chain operates 182 restaurants across nine states, Georgia, Tennessee, Alabama, Florida, Kentucky, Mississippi, North Carolina, South Carolina and Arkansas. In addition, franchisees currently own and operate 116 Krystal restaurants.

In its filing, the company cited a number of contributing factors to its bankruptcy that included increasing competition, shifting customer tastes and the rise of online delivery platforms. Also cited was the tight labor market, which has made it hard for the chain to find employees.

The company, which is now headquartered in the Atlanta suburb of Dunwoody, was founded in Chattanooga in 1932, and is the oldest quick-service restaurant in the South and the second oldest in the United States. K-Square Restaurant Partners LP acquired The Krystal Co. in 2012.

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Bankrupt retailer Forever 21 Inc. is setting its sights on e-commerce sales outside the United States, where consumer spending is rising rapidly.

In partnership with international e-commerce platform Global-e, Forever 21 has revived its international e-commerce site, Pacific Business News reports. Its goal will be to reach consumers in the Asia-Pacific region, where spending power is predicted to rise dramatically in the coming years, as well as in Latin America and Canada.

As Forever 21 ramps up its online business, its brick-and-mortar presence is shrinking. At the time of its Chapter 11 bankruptcy in September, Forever 21 said it planned to close as many as 178 U.S. stores, along with many of its stores in Asia and Europe, though the U.S. total was later modified to about 111.

The Los Angeles-based fast-fashion retailer obtained $275M in financing from existing lenders, as well as $75M in new capital to facilitate its restructuring efforts. 

Retailers like Forever 21 have been struggling with a major decline in spending on clothes among Americans. Over the last 40 years, U.S. household apparel spending has dropped by half, from 6.2% of disposable income to 3.1%, Retail Dive reports, citing Bureau of Labor Statistics data.

Besides Forever 21, a good many other fashion retailers filed for bankruptcy in 2019, including Charming Charlies, Charlotte Russ and Gymboree, as well as  the massive liquidation of Payless ShoeSource.

The bankruptcies are part of a wider winnowing for the retail industry. According to Coresight Research, 9,302 U.S. store closures were announced in 2019 as of mid-December, up from 5,844 closures in 2018. But store openings for the year were also up, with 4,392 announced as of mid-December 2019, as opposed to 3,258 openings during 2018.

In a separate development for Forever 21, an Alabama mall owner has filed a lawsuit against the bankrupt retailer, alleging that Forever 21 lied about sales projections for a store it opened at the Eastern Shore Centre in suburban Mobile, the Los Angeles Times reports.

The landlord, Allied Development, agreed to allow Forever 21 to pay a percentage of gross monthly sales as rent, based on what the suit asserts were misleading estimates of those sales. The retailer promised at least $6M in sales in its first year, but actually tallied only $1.6M, the suit alleges.

The plaintiff is asking for damages of at least $2.1M, along with $6M in punitive damages. Forever 21 has moved to dismiss the suit.