U.S. Bankruptcy Judge Kevin Gross yesterday said in a hearing that he would approve the sale of the retailer to its two largest landlords — Simon Property Group Inc. and Brookfield Property Partners LP — and Authentic Brands Group LLC, marking the end of control by the Chang family, Bloomberg News reported. Forever 21 was a creation of its founders, Korean immigrants who built the Los Angeles-based chain into an international empire, but it fell into trouble after failing to keep up with consumers’ tastes, among other problems. The new owners have agreed to pay $81 million in cash and assume certain liabilities, including $53 million in merchandise not yet paid for, Aparna Yenamandra, a Kirkland & Ellis LLP attorney representing Forever 21, said in the hearing. The deal preserves about 25,000 jobs at Forever 21, Tyler Cowan, Forever 21’s investment banker and a managing director at Lazard Ltd., said in the hearing. Another unidentified potential buyer was trying to pull together a bid for the retailer as recently as last weekend, but was unable to secure the necessary financing, Cowan said. Court papers show the buyers have the right to close stores, and it wasn’t immediately clear how many would remain open. The beleaguered retailer once operated about 800 stores in more than 40 countries. Read more.
https://finance.yahoo.com/news/judge-approve-forever-21-sale-214642870…
In related news, analysts are split about whether Simon Property Group Inc.’s bid to rescue a distressed fast-fashion retailer will succeed, but even skeptics say the mall giant may have little choice but to salvage one of its most important tenants, the Wall Street Journal reported. Simon Property, Brookfield Property Partners LP and Authentic Brands Group LLC made an $81 million bid for Forever 21 Inc. last week. The retailer now says it will go ahead after no rival bids emerged. Simon Property counted 98 Forever 21 stores occupying 1.5 million square feet in its U.S. portfolio at the end of the third quarter, filings show. That made it the landlord’s seventh-biggest tenant in terms of one rent metric, the percentage of total base minimum rent, though Forever 21 dropped to 12th in the fourth quarter after the landlord reduced rent. Simon Property said Monday it was also buying rival mall owner Taubman Centers Inc. in a $3.6 billion cash transaction. Read more. (Subscription required.)
https://www.wsj.com/articles/stakes-run-high-for-mall-owner-trying-to-s…
