Forever 21 Cancels Auction, Readies Sale To Mall Owners
February 10 2020 - 3:20PM
Dow Jones News
By Soma Biswas
Forever 21 Inc. is moving forward with a sale to a group of
buyers that includes Simon Property Group Inc. after no rival
bidders qualified to challenge the offer, according to court
filings.
A group made up of Forever 21's biggest landlords -- Simon and
Brookfield Property Partners LP -- along with Authentic Brands
Group LLC, a brand licensing firm, has offered $81 million for the
bankrupt fast-fashion retailer.
Forever 21 said Sunday it was scrapping a planned auction for
Monday after it didn't receive any other qualified offers
The landlord takeover is similar to Simon Property's acquisition
of mall-based retailer Aéropostale Inc. in 2016. In that sale, the
real-estate investment trust teamed with Authentic Brands and
General Growth Properties on the deal.
Meanwhile, Simon Property will become an even bigger owner of
malls, and a bigger landlord to Forever 21, following its deal to
buy Taubman Centers Inc. for $3.21 billion. Taubman is a landlord
to 21 Forever 21 stores, court filings show.
Judge Kevin Gross will consider approval of the sale Tuesday at
a hearing scheduled for U.S. Bankruptcy Court in Wilmington,
Del.
The sale of Forever 21 means the end of the Chang family's
control of the retailer. The family founded the chain in 1984.
The fast-fashion retailer filed for bankruptcy in September.
While other chains were shrinking store sizes and closing
locations, Forever 21 pushed into spaces that in some cases were
double or triple the size of previous locations. To help fill them,
Forever 21 pushed into categories such as menswear, footwear,
lingerie and plus sizes.
A spokeswoman for the company had no immediate comment.
Write to Soma Biswas at soma.biswas@wsj.com
(END) Dow Jones Newswires
February 10, 2020 15:05 ET (20:05 GMT)
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