Authentic Brands Group and landlords Simon Property Group and Brookfield rescue the Forever 21 empire. The consortium’s bid of $81.1 million was accepted after no rival bidders qualified to challenge the offer, according to the court filings. According to sources, Forever 21 co-founders Do Won and Jin Sook Chang are no longer involved and the new owners have initiated a search for a CEO.

WHO: Forever 21 was founded in 1984 by South Korean husband-and-wife duo Do Won Chang and Jin Sook Chang and through the decades has remained a privately held company. At the time of filing for bankruptcy Forever 21 had over 800 stores globally, and at its peak was doing more than $4 billion in sales annually.

WHY: The California-based retailer lost its way over the past five years, with experts citing changing trends and consumer tastes, and missteps by the company filing for Chapter 11 bankruptcy protection in the US in September. The company has struggled to raise money to exit bankruptcy, with potential lenders and buyers balking because of poor sales and the founding Chang family’s insistence on maintaining control.

IN THEIR OWN WORDS: “Forever 21 is a powerful retail brand with incredible consumer reach and a wealth of untapped potential,” said Jamie Salter, founder, Chairman, and CEO of ABG, said in a statement. “We’re looking forward to working with the Forever 21 team and our global partners. Together, we’ll revitalize the brand’s core business and connect with audiences around the world through new product offerings and experiences.”

“If we are successful at turning it around, we will make money at F21 and we will make our rent,” Simon Property CEO David Simon said.

DETAILS:

• Authentic Brands Group and landlords Simon Property Group and Brookfield buy Forever 21 for $81.1 million.
• Brand management company Authentic Brands and Simon Property will own 37.5% each of the retailer, while Brookfield Property would buy 25% of the intellectual property and operating businesses.
• Forever 21 is the seventh-biggest tenant in malls owned by Simon, which is leading the buyout venture.
• If Forever 21 can be revived quickly, its $2 billion-a-year annual revenue stream should remain mostly intact—and Simon will own “just under” 50% of that, according to TheRealDeal.
• Tyler Cowan, Managing Director at Lazard Frères & Co. LLC and Forever 21’s investment banker, estimated to the Delaware bankruptcy court on the case that the fast-fashion retailer owes more than $120 million to vendors for goods and services they provided during the bankruptcy, known as administrative expenses. The retailer also owes more than $10 million in administrative expenses to non-merchandise vendors, Forever 21’s advisers told the court.
• In 2016, Simon took a similar tack through its partnership with mall owner General Growth Properties—now owned by Brookfield—to save Aeropostale from liquidation.
• Forever 21, which has over 800 stores in 57 countries, will continue to operate in US and international markets.
• The retailer’s current, owned store operations in Central America, South America, Mexico, the Philippines, and the Caribbean would be converted to a licensed partnership model.
• The new owners are working with existing and new partners to expand Forever 21 across key territories, including South America, China, the Middle East, and India.