The fashion retailer has looked into the possibility of filing for Chapter 11 bankruptcy, Bloomberg reported, though there is still reportedly hope that a deal will be made with possible financiers to save the brand.
If the company does file for bankruptcy, it would be able to get rid of unprofitable locations and renew the business, according to anonymous sources who spoke to Bloomberg.
However, it could also hurt mall owners, because Forever 21 is one of the biggest mall tenants still open as retailers continue to go bankrupt and close their doors, the outlet reported.
According to Bloomberg, Forever 21 is the sixth-largest non-department store tenant to Simon Property Group, one of the largest shopping mall operators in the U.S.
Neither Forever 21 nor Simon Property Group immediately responded to FOX Business’ request for comment on Thursday evening.
Many other brick-and-mortar retailers have struggled to keep their doors open in the face of online shopping.
On Wednesday, Hudson’s Bay announced it will sell Lord & Taylor to clothing rental subscription service Le Tote for $100 million.
Le Tote will gain control over 38 Lord & Taylor stores, its online sales and all of its inventory, and the company says it plans to extend employment offers to “the vast majority” of Lord & Taylor’s workers.
Former Hudson's Bay CEO, Storch told FOX Business Wednesday, “Lord and Taylor, the department store as a whole, as a category, has been struggling vitally in this environment.”
The historic store's biggest liability may have been what it does not have. “Lord and Taylor is an extreme case of a department store disease because it’s what people used to a call junior department store since it doesn’t have a home department," said Storch.
The veteran retail executive said that today, home is one category that has held up better than apparel, therefore Lord & Taylor’s lack of home inventory can be seen as a reflection of the weakened performance in mainstream department stores overall.
FOX Business’ Jeanette Settembre and Cortney Moore contributed to this report.