Nothing’s Forever: NY, LA, Chicago, SoFla stores among those on Forever 21’s closure list

Creditors, including mall REITs Simon Property and Macerich, claim Forever 21 owes them a combined $21M in unpaid rent

TRD NATIONAL /
Oct.October 01, 2019 04:51 PM
Clockwise from left: Forever 21 at 1 World Trade Center NY, 6801 Hollywood Blvd in LA, 865 West North Ave in Chicago and 701 Lincoln Road in Miami (Credit: Gloria Tso for The Real Deal, Google Maps)

Clockwise from left: Forever 21 at 1 World Trade Center NY, 6801 Hollywood Blvd in LA, 865 West North Ave in Chicago and 701 Lincoln Road in Miami (Credit: Gloria Tso for The Real Deal, Google Maps)

Forever 21 identified a quartet of New York City stores on its list of 178 locations in the United States that the struggling retailer has slated for closure.

The brand also slated 20 stores in the Los Angeles area, along with nine in Chicago and three more in South Florida.

In Manhattan, the fast fashion pioneer included its stores at Allied Partners’ 568 Broadway in Soho and Westfield’s World Trade Center Mall on a list of underperforming locations it plans to close as part of a Chapter 11 restructuring, according to paperwork filed in bankruptcy court in Delaware Tuesday.

In Brooklyn, the company plans to shutter stores at Crown Acquisition’s 490 Fulton Street in Downtown Brooklyn at Macerich’s King Plaza Mall in Mill Basin.

In South Florida, the stores include those on Lincoln Road in Miami Beach as well as in The Gardens in Palm Beach Gardens and in Pembrokes Lakes Mall in Pembroke Pines.

Among Forever 21’s top 50 creditors, Simon Property Group, Brookfield Property REIT, Macerich, Westfield and Vornado Realty Trust claim in court papers that Forever 21 owes them a combined $20.9 million in unpaid rent.

The brand’s filing is the latest blow to the retail market, following in the footsteps of companies like Sears, Toys R Us, Barney’s and Payless among others that have collapsed.

Forever 21 expects to start closing stores no later than Oct. 31, and finish vacating the locations by the end of the year. The company operates 549 stores across the country, and already owes millions to its largest landlords.

The list is subject to change. Forever 21 noted in court filings that unlike other retailers who have sought Chapter 11 relief, the company expects to receive support from its landlords in order to put together a “consensual solution to an industry-wide problem.”

That’s not always the case in these kinds of proceedings, according to Ballard Spahr attorney Craig Ganz, a bankruptcy specialist who is not involved in the case.

In a typical retail bankruptcy, he said, landlords won’t hear from their debtors’ attorneys until either the eve of the bankruptcy filing or there will be no communications and the debtor will simply file.

“I think one thing that is significant here is that four landlords hold 50 percent of all the leases in Forever 21’s portfolio,” he said. “That percentage is giving the landlords some leverage here and that may be a reason why Forever 21 has taken this active approach.”


Related Articles

arrow_forward_ios
The Future is Flexible: Office Leasing and the Digital Workspace

The new digital office experience

The new digital office experience
New building technology could help stop California brownouts

New building technology could help stop California brownouts

New building technology could help stop California brownouts
Advances in GIS technology could help create richer, deeper narratives about real estate.

Advances in GIS technology could help create richer, deeper narratives about real estate

Advances in GIS technology could help create richer, deeper narratives about real estate
Hotels struggling under Covid-19 must pivot to alternate sources of revenue

Hotels struggling under Covid-19 must pivot to alternate sources of revenue

Hotels struggling under Covid-19 must pivot to alternate sources of revenue
Digital twins prove their benefit in wake of COVID-19

Digital twins prove their worth in wake of Covid-19

Digital twins prove their worth in wake of Covid-19
Face masks force a facial recognition reckoning

Face masks force a facial recognition reckoning

Face masks force a facial recognition reckoning
The growing trend of ESG Investing in commercial real estate

The growing trend of ESG Investing in commercial real estate

The growing trend of ESG Investing in commercial real estate
How new HVAC requirements will affect store reopenings and sustainability goals

How new HVAC requirements will affect store reopenings and sustainability goals

How new HVAC requirements will affect store reopenings and sustainability goals
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...