Forever 21 has a new fan — Jamie Salter, chief executive officer of Authentic Brands Group.
The brand management maestro is working with a landlord and considering a bid to buy the fast-fashion chain out of bankruptcy, according to a financial source contacted by WWD and a Bloomberg report, which identified Simon Property Group as Authentic’s partner.
That stands as proof that Salter is working across the full breadth of the fashion retail spectrum since he put together a successful bid to buy the uber high-end Barneys New York out of bankruptcy in the fall.
While neither Salter nor a representative for Simon could be reached immediately, a deal could make sense.
Forever 21 — known for rock-bottom prices and a certain at-times uncomfortable willingness to borrow design inspiration — was negotiating with landlords before it succumbed to a bankruptcy filing in September. Although no deal was reached, the retailer expected “good-faith negotiations with its landlord constituency will continue post-petition.”
Mall operator Simon ranked as Forever 21’s eighth-largest creditor, owed $8.1 million in rent when the company went under.
If Simon were ultimately part of a group that bought Forever 21, it could work to lessen the impact on its malls.
And Authentic is positioned — and experienced — at getting the most out of retail nameplates and could put the brand to use elsewhere.
The branding house has also been preparing for a moment like this, forming alliances with landlords and establishing the operating capacity to run retail chains when necessary.
Authentic teamed with landlords Simon Property Group and General Growth Properties and two liquidators to buy Aéropostale out of bankruptcy in 2016. That helped Authentic build an operating hub that makes it a player in such a wide range of fashion dealmaking.
Even so, Forever 21 would be a big undertaking.
The company came into bankruptcy planning to shutter up to 178 of its 549 U.S. stores while also closing most of its stores in Europe and Asia.
That still leaves a significant retailer — and one that’s struggled to compete effectively with Zara and H&M, its main competitors in fast fashion, a category itself that is in question given the rise of a consumer more focused on sustainability.
Founded in 1994 in Los Angeles by Do Won Chang and his wife Jin Sook, Forever 21 was at its heart a family business that grew to enormous scale — at its peak raking in $4.1 billion in sales annually and employing 43,000 people.
The founding family retained ownership of the business as it grew, but eventually got tripped up, expanding to 57 countries internally and opening larger stores just as the consumer pivoted to the web and more-lasting styles.