Fast-fashion juggernaut Forever21 appears to have hit a wall: The retailer is seeking $150 million in financing from Wells Fargo & Co. and TPG Capital.
People familiar with the matter told The Wall Street Journal that the go-to for trendy clothing at cheap prices has experienced its sales and profit taper off after years of strong growth.
The family-owned retailer, which reveals sparse details about its earnings, previously predicted sales would rise 10 percent to $4.7 billion this year. But sources have said it’s struggled to fill giant stores with the right merchandise, particularly in Europe, where it’s had a presence since 2011. A loan, therefore, could be used to buyout leases at troubled stores across the pond, as well as help fund Forever 21’s expansion in South America.
In addition, the sources said it might downsize some of its larger locations.
With a goal of becoming an $8 billion company by 2017, the retailer currently has 720 stores around the world and plans to nearly double that in the next two years.