Forever 21 is searching for a new chief financial officer.
The fast-fashion chain said its cfo, Elizabeth Jain, has resigned effective June 10 to pursue other opportunities closer to her family and home. The company said it has initiated an external search for a full-time successor. Until a new cfo is named, the chain’s head of corporate strategy will have oversight over accounting and tax functions, finance, treasury and payroll matters.
Don Chang, founder and chief executive officer of the retailer, thanked Jain for her “contributions during her six years as cfo, during which Forever 21 has grown to become a leading, global fashion retailer.”
Since last summer the retailer has been dogged by rumblings that it’s not doing well, and that sales have been slowing. There was talk last summer that it was in talks for a $150 million loan, but sources said to date the company hasn’t needed to borrow any additional funds.
The company said reports of financial difficulties are “categorically false.”
Chang addressed those reports as well on Friday, stating, “Forever 21’s business remains solid, as we continue to take a proactive approach and strategically evaluate our portfolio, cutting costs where appropriate. At the same time, we are actively opening Forever 21 and F21 RED stores in new locations and markets around the world, to which we have seen positive response.”
F21 RED is the company’s even lower price-point concept.
So far the company has opened 34 stores and plans to open another 48 stores this year. Some of those stores will be in eight new markets: Bolivia; Bulgaria; the Czech Republic; Egypt; Paraguay; Poland; Romania, and Slovakia. It has a total of 774 stores thus far in 49 countries.
But despite Chang’s assertion that the company’s financials are fine, some credit analysts and factors think otherwise. They also have been complaining that the firm — which is privately held — doesn’t provide up-to-date financial information often enough for them to evaluate the company for credit check approvals. Vendors who provide goods need to know credit strength to ensure they’ll get paid for merchandise on order and shipped to the stores.
Individuals familiar with the company’s operations suggested that past issues may have revolved around the firm’s migration to payment terms more in line with the industry standard.