Forever 21 is considering multiple options to turn around its business, which could include a second bankruptcy filing, according to people with knowledge of the matter.

The company is focused on finding buyers for profitable leases, said the people, who asked not to be identified discussing a private matter. If that fails, it would turn to Chapter 11, though discussions are ongoing and no final decision has been made, they added.

Forever 21 is working with BRG for restructuring assistance, said some of the people. BRG did not immediately respond to a request for comment.

“As previously announced, Catalyst Brands is exploring a range of strategic options for the operations of Forever 21, and we are working diligently to achieve the best possible outcome,” a spokesperson for the company said in an emailed statement.

Sparc Group, the operator of fashion brands that includes Forever 21 as well as Lucky Brand, Eddie Bauer, Aeropostale and Brooks Brothers, merged with JCPenney to form a new company called Catalyst Brands in January. Authentic Brands Group bought the Forever 21 brand name out of bankruptcy in February 2020 and licensed it to Sparc Group.

The Wall Street Journal first reported that the company is considering filing for bankruptcy.

By Reshmi Basu and Eliza Ronalds-Hannon

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Lucky, Forever 21 Operator Merges With JCPenney

The joint venture was formed in an all-equity transaction between JCPenney and SPARC Group and its shareholders Simon Property Group, Brookfield Corp., Authentic Brands Group and SheIn Group Ltd., according to the release. Catalyst will be headed by former JCPenney chief executive officer Marc Rosen.