- Permanently 21 declared Chapter 11 personal bankruptcy defense on Sunday.
- As part of the filing, the company said it would close up to 350 stores globally. It could close as many as 178 underperforming shops in the US, though it will have sales and lease negotiations through December 31.
- With the possibility of so numerous stores closing, those with present cards from Permanently 21 should spend them as quickly as possible, said Jay Klauminzer, the CEO of the leading online gift card market Raise
- About 177 million gift cards were left impressive when Borders liquidated its shops in September2011, which led customers to file an unsuccessful claim to recoup their losses– worth an estimated $2105 million.
- ” In the U.S., our stores are open and business is continuing as normal, customers will not see any modifications in stores, gift cards will continue to be accepted, our policies, consisting of returns and exchanges, stay the very same, and customers can still purchase online,” a representative from Forever 21 told Business Insider.
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Permanently 21 is facing an unsure future, and for gift card holders, now is the very best time to act.
The fast-fashion retailer declared insolvency on Sunday and prepares to close up to 350 shops globally. It might close as lots of as 178 underperforming stores in the United States, though it will have sales and rent settlements through December 31.
” In the U.S., our stores are open and service is continuing as usual,” a representative from Permanently 21 informed Service Insider. “Customers will not see any modifications in stores, present cards will continue to be accepted, our policies, consisting of returns and exchanges, stay the same, and consumers can still purchase online.”
Though Forever 21 is still running stores and its online service, an expert says that those who are holding present cards from the business need to redeem them as soon as possible.
” Your finest bet is to spend your present cards right now while there are still staying stores and an online existence,” stated Jay Klauminzer, CEO of Raise, a leading mobile payments and pre-paid gift card platform. “Otherwise, if there is worth left after the business physically closes, you end up being an unsecured financial institution.”
When Borders liquidated its stores in September 2011, about 17.7 million gift cards worth an estimated $2105 million were left exceptional. Consumers submitted a claim to redeem the worth of the cards, but a judge ruled that the gift cards were worthless.
Toys R United States present cards likewise ended in April 2018 as the business prepared to close all its United States stores.
Though Forever 21 did not reveal a strategy to close all of its shops, Klauminzer states that now is the time to act to avoid getting stuck to an useless gift card in case of a total liquidation.
” In the payment waterfall, your place in line is behind any safe credit holders, such as financial obligation holders or loan suppliers,” Klauminzer said. “As an outcome, you would get a very minimal payback (only cents on the dollar– if even that much!). By using it right now, the amount is guaranteed.”
A spokesperson for Forever 21 said that the company’s dicussions about US store closures are still continuous.
” We do, however, expect a substantial variety of these stores will stay open and operate as usual, and we do not expect to exit any major markets in the U.S. Forever 21 has had and expects to continue efficient discussions with landlords,” the spokesperson stated.
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