Forever 21 Acquires Reference Assets

Forever 21 Inc., a fast-growing chain of low-cost apparel stores for young women, said Monday that it acquired nearly all the assets of rival Reference Co. out of Bankruptcy Court.

Los Angeles-based Forever 21 paid $3.5 million to acquire 14 of Reference’s 16 stores, as well as its remaining inventory, said Larry Meyer, Forever 21’s chief financial officer.

He said the purchase would allow Forever 21 to grow more quickly, especially in California, where 11 of the 14 Reference stores are located.

Both companies target young women aged 15 to early 30s. At one point, Reference had 30 stores nationwide. Forever 21 operates 153 stores in 25 states and Canada.

Meyer said Forever 21 might keep the Reference name on some of the acquired stores, including four located in malls where Forever 21 already has a presence. Others may be converted to the Forever 21 brand.

It is not clear what will happen to the two outlets Forever 21 did not purchase, Meyer said. The mall where one of the Reference stores was located has contacted Forever 21, asking if it would like to pick up the lease.

Reference filed for Chapter 11 protection from its creditors in Los Angeles Bankruptcy Court on Jan. 9.

Forever 21, a private company, collected about $400 million in revenue last year. It plans to open 25 to 30 additional stores this year, not including the ones purchased in the Reference bankruptcy, Meyer said.