Forever 21 Inc. is scrambling to line up additional financing this month as cash to pay vendors and landlords dwindles to a critical level, Bloomberg News reported. The clothing retailer is in discussions with potential lenders for financing including a so-called FILO loan. Fresh cash is key as Forever 21 heads into the period for building holiday inventory while its business is struggling. Named after the “first-in, last out” accounting method for inventory, FILO loans are senior debt backed by a company’s inventory and other assets and supplement the so-called asset-based loans retailers use for their primary needs. The retailer has hired a team of advisers, Bloomberg previously reported, to help it restructure its debt and revive its business. Co-founder Do Won Chang is determined to maintain control, which could limit the company’s options. A small faction of Forever 21 officials have asked its biggest landlords to consider taking a stake in the company amid disagreement within its leadership on how to turn the company around.
