Forever 21 stores in Roseville, Folsom could close as company files Chapter 11 bankruptcy

Two Sacramento-area Forever 21 stores are under threat of closure as the fashion retailer undergoes Chapter 11 bankruptcy proceedings after filing for protection this weekend.

An outlet in Roseville’s Westfield Galleria mall and the one in Folsom’s Palladio at Broadstone were listed among 178 lackluster stores in the United States that may be closed to alleviate financial pressure on the company.

Forever 21 management examined its 549 stores on the merits of historical profits, rent costs and their local markets, and sought authorization to close some of them, but in a bankruptcy filing document, the company said it did not plan on closing all of the selected locations.

“After conducting the performance evaluation, the debtors’ management team and advisors determined it may be appropriate to close and wind down or conduct other similarly themed sales for up to 178 underperforming brick-and-mortar store locations,” a bankruptcy document filed Tuesday said.

Forever 21 has been entering into negotiations with landlords of its stores in an attempt to lower rent payments and acquire more favorable leases on properties, which may affect future closures.

“As the debtors negotiate rent concessions and other operational improvements with the applicable landlords, the debtors expect that it will be in the debtors’ best interest not to conduct store closings at certain locations,” the company said in its filing. “Where the debtors are unable to obtain sufficient relief in the lease negotiations concerning stores that are on the cusp of failing to meet certain performance standards, such stores will close.”

The Associated Press reported that the Los Angeles-based trendy fast-fashion company was at its zenith during the Great Recession, when its bargain prices attracted penny-pinching shoppers, but online competitors have since cut into its profits.

About 16 percent of Forever 21’s sales stem from online purchases, according to its bankruptcy filing.

A handful of stores elsewhere in California, including locations in Modesto and Fresno, are also on the company’s chopping block.