Forever21 nears bankruptcy in new blow for high street

Fashion retailer Forever21 is teetering on the brink of bankruptcy, in the latest example of the malaise hitting high-street businesses.

The US-based firm has 39 outlets in Europe, out of a total portfolio of more than 600 units worldwide.

Newswire Bloomberg reported talks with potential lenders have collapsed, sending the firm towards a Chapter 11 bankruptcy, which would enable it to close some under-performing branches.

The loss of Forever21 stores from high-street locations would create a headache for landlords forced to seek new tenants, at a time when the travails of physical retail are in the spotlight due to the sector's failure to get to grips with e-commerce.

Several fixtures of the high street - both in the US and Europe - have disappeared in recent years as they fall victim to the rise of online shopping. V&D in the Netherlands, Debenhams in the UK, and Kaufhof in Germany, are among the names to go against the wall recently.

Listed shopping centre owners such as Intu and Hammerson in the UK are among the worst stock market performers in terms of total returns this year. In the UK, Arcadia group, which owns Topshop, was forced to secure CVAs in a bid win rent cuts from its landlords.

Forever21 shut its flagship outlet in Amsterdam, the Netherlands, last year.

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