- Forever 21's sale to Simon Property Group, Brookfield Property Partners and Authentic Brands Group was approved by a federal bankruptcy judge at a Tuesday hearing, according to an attorney for Forever 21 who spoke with Retail Dive, and media reports.
- The approval came despite numerous objections, many limited to specific aspects of the sale or its process, from suppliers and landlords filed after Forever 21 canceled an auction scheduled for Monday.
- One group of Forever 21 suppliers, who objected to the quick sale process, said in court papers that they knew of another possible buyer for the retailer interested as late as Monday evening. But that party could not round up the financing in time, according to the group. Ultimately, no other qualified bids emerged ahead of the auction.
The list of stakeholders who objected ahead of Tuesday's hearing ran into the dozens. Landlords and suppliers alike are concerned they will lose millions as Forever 21 sells to the buyer group for $81 million, a relatively paltry price for a retailer that at its peak made $4 billion in annual sales.
That pot of money has to be spread around numerous creditors. One group of overseas suppliers, who filed a limited objection against the sale Tuesday, said they are owed roughly $40 million for goods shipped to Forever 21 since it filed for Chapter 11.
They alleged that vendors more generally "have suffered literally hundreds of millions of dollars of unpaid claims" and asked the court not to approve a plan that didn't allow vendors to pursue claims against Forever 21's lenders.
The deal for Forever 21 sets aside $53 million for merchandise not yet paid for, which hasn't eased the worries of several suppliers who fear they'll be left unpaid.
The agreement also allows the buyers to continue exiting Forever 21 stores in bankruptcy, though its unclear if they will do so.
So far, the buying group has offered few details about their plans for Forever 21, including who will lead it after decades of being tightly controlled by its founding family.
On a call with analysts, Simon Property CEO David Simon declined to share details of the plan for the retailer but said that "we do think there is a business there, but it's got to be turned around." He added, "And I'm not going to project today to you what those numbers are, but we've got our work ahead of us."