Forever 21 fashion chain files for Chapter 11 bankruptcy

Low-price fashion chain Forever 21, a one-time hot destination for teen shoppers that fell victim of its own rapid expansion and changing consumer tastes, announced Sunday, Sept. 29, 2019, that it has filed for Chapter 11 bankruptcy protection. (AP)
Updated 30 September 2019

Forever 21 fashion chain files for Chapter 11 bankruptcy

  • As of the bankruptcy filing, the company operated about 800 stores globally, including more than 500 stores in the US
  • Forever 21 plans to close most of its locations in Asia and Europe

NEW YORK: Low-price fashion chain Forever 21, a one-time hot destination for teen shoppers that fell victim to its own rapid expansion and changing consumer tastes, has filed for Chapter 11 bankruptcy protection.
The privately held company based in Los Angeles said Sunday it will close up to 178 stores in the US. As of the bankruptcy filing, the company operated about 800 stores globally, including more than 500 stores in the US
The company said it would focus on maximizing the value of its US stores and shutter certain international locations. Forever 21 plans to close most of its locations in Asia and Europe but will continue operating in Mexico and Latin America.
“The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords,” it said in the statement. “We do, however, expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the US“
Forever 21 joins Barneys New York and Diesel USA in a growing list of retailers seeking bankruptcy protection as they battle online competitors. Others like Payless ShoeSource and Charlotte Russe have shut down completely.
The numbers bear out the crisis facing traditional retailers. So far this year, publicly traded US retailers have announced they will close 8,558 stores and open 3,446, according to the global research firm Coresight Research. That compares with 5,844 closures and 3,258 openings in all of 2018.
Coresight estimates the store closures could number 12,000 by the end of 2019.
Forever 21 was founded in 1984 and, along with other so-called fast fashion chains like H&M and Zara, rode a wave of popularity among young customers that took off in the mid-1990s.
Their popularity grew during the Great Recession, when shoppers sought fashion bargains.
But over the last year or so, fast fashion has fallen out of style. Young customers are losing interest in throw-away clothes and are more interested in buying eco-friendly products. They’re also gravitating toward rental and online second-hand sites like Thredup, where they see clothes worn again instead of ending up in a landfill.
These trends are happening while discounters like Target have spruced up their fashion assortments, stealing away customers.
Forever 21 has also been more vulnerable than some other chains because of its large footprints in major malls, which are attracting fewer shoppers.


Saudi Aramco sets IPO share price between 30-32 riyals

Updated 17 November 2019

Saudi Aramco sets IPO share price between 30-32 riyals

  • Saudi Aramco intends to buy $1 billion worth of shares for employee

DUBAI: Saudi Aramco’s multibillion-dollar initial public offering (IPO), probably the biggest in history, shifted to full gear as its share price was announced and subscription to the world’s biggest oil company commenced on Sunday.

Saudi Aramco set an indicative share price between 30 and 32 riyals for the 1.5 percent of its shares – or about 3 billion shares of its 20 billion regular shares – that it would offer for  the domestic part of its public offering. The blockbuster IPO could be worth least $24 billion, and values the state-owned oil giant at up to $1.71 trillion.

The offering – or book-building – period for institutional subscribers, which started today, closes on December 4 while the retail offering for individual investors will begin on November 21 and will end on November 28.

The final pricing for the Aramco shares would be announced on December 5.

___

For more of our coverage of the Aramco IPO, click here.

To view key Aramco IPO documents, click here.

___

Samba Capital & Investment Management Company has been designated as issue manager while National Commercial Bank, Saudi British Bank, Samba Financial Group, Saudi Investment Bank, Alawwal Bank, Arab National Bank, Albilad Bank, Aljazira Bank, Riyad Bank, Al Rajhi Bank, Alinma Bank, Banque Saudi Fransi and Gulf International Bank were named as receiving banks.

If there are applications for more than the 0.5 percent on offer — amounting to 1 billion shares — allocations to private investors will be scaled back proportionate to demand; if there are fewer applications than the 0.5 percent when all maximum applications are satisfied, private investors can have the over-payment refunded either in cash via the receiving banks or in the form of extra shares in Aramco.

There is an incentive mechanism in the IPO whereby Saudi investors will receive a bonus one-for-ten allocation of shares, up to a maximum of 100 shares, if they do not sell shares in the market for a period of six months after dealings begin in December, at a date still to be determined.

Saudi Aramco also intends to buy $1 billion worth of shares for employees under a plan to incentivize executives and staff members alongside the IPO next month.

The plan — which was disclosed in the IPO prospectus — will involve Aramco buying the shares from the government and making them available for employees under special terms.