According to sources, Forever 21 co-founders Do Won and Jin Sook Chang, are no longer involved with the bankrupt chain and a search is underway to bring a new CEO on board.
The ABG-Simon-Brookfield consortium acquired the operating component and related intellectual property assets while Forever 21 was in bankruptcy proceedings for $81 million.
“Forever 21 is a powerful retail brand with incredible consumer reach and a wealth of untapped potential,” Jamie Salter, ABG founder, chairman and CEO said.
The deal is similar in structure to the one ABG and Simon struck when the pair, along with General Growth Properties, bailed bankrupt teen chain Aéropostale out of bankruptcy in 2016, though the ownership structure is different this time.
ABG typically takes 100 percent ownership of the intellectual property assets, leveraging its strength in licensing and brand building. In the Forever 21 structure, however, ABG and Simon each own a 37.5 percent stake in the retailer, with Brookfield taking the remainder.
When it voluntarily filed a Chapter 11 petition in September, Los Angeles-based Forever 21 operated about 549 stores in the U.S. and 251 stores internationally, with the overseas locations run by non-debtor affiliates. Those numbers had been pared to 448 domestic and 145 overseas doors when the purchase agreement was finalized Wednesday.
All U.S. stores are company owned, while the ones operated overseas are expected to convert from a company owned to a franchised model.
Speaking to Forever 21’s new future, Salter noted plans to coordinate with global partners and “revitalize the brand’s core business and connect with audiences around the world through new product offerings and experiences.”
ABG plans to leverage its marketing expertise and relationship worldwide to inject new life into the brand, with an emphasis on trend-conscious design, speed-to-market, and a more sustainable supply chain, the brand management firm said.