In The Face Of The Crisis, The Controlling Stake In Forever 21 Will Be Handed Over To The Real Estate Developers.

With the American retail industry entering the cold winter, the traditional clothing brands in the United States are facing serious crises, including fast fashion Forever 21.

According to Bloomberg insider, as part of the restructuring plan, Forever 21 will transfer part of its shares to the largest two real estate developers, Simon Property Group and Brookfield Property Group, and the brand co founder Do Won Chang will retain the remaining shares, but the specific transaction content has not yet been announced.

Although Forever 21 denied last week's bankruptcy, people familiar with the matter continued to point out that Forever 21 will apply for bankruptcy protection as soon as possible this month. The ideal situation is to get 75 million yuan of liquidity to maintain the normal operation of the brand during the restructuring period.

It is noteworthy that Forever 21 entered Tongluowan, Hongkong in September 2011, and became the first flagship store in the territory. It signed 6 long tenancies, including Watsons and other old tenants. The rent was twice as high as the old rent. The rent in the first year was as high as 11 million yuan, and the subsequent rent increased by 1 million yuan a year.

However, due to the cold winter in Hongkong, Forever 21 launched the top rental business in 2016, but failed to find other merchants at the current price to support the lease.

According to data from market research firm Coresight Research Inc., the fate of fashion retailers such as Forever 21 is becoming more and more important to the owners of shopping malls. This year, American retailers have closed more than 8500 stores, exceeding the total amount of last year. Therefore, there is an analysis and speculation that the important purpose of Forever 21 transfer to two major owners is to get the rent relief to reduce the high rent pressure.

During a conference call with investors in July 31st to discuss the second quarter earnings, Simon Property Group CEO David Simon said that the company was ready to invest in troubled tenants. "We hope that not only a real estate company, but also a buyer of these brands."

Fast fashion market is now in danger. Fast fashion, once popular in China, is now being forced to withdraw at the same speed, but in a short period of 5 years. According to fashion business news, Forever 21 has officially withdrawn from the Chinese market after closing Tmall and Jingdong flagship stores and the Chinese official website.

Before China, Forever 21 began withdrawing from Belgium, Holland, the United Kingdom, Germany, France and Japan and Australia, and most of its stores in North America have been closed since 2016. According to Forbes data, sales of Forever 21 fell by 14% to 3 billion 400 million US dollars in 2017, and the loss was as high as 400 million US dollars.

In addition to the trouble of over expansion, Forever 21 is facing the dilemma of the awakening of consumer attitudes. The vast majority of Forever 21 products cost between $4 and $20. Now consumers are making choices about the availability and morality of clothing, and are getting tired of the Forever 21 low quality and low quality goods.

Up to now, the three parties have not responded to the news.