Forever 21 negotiating a 150 million dollars loan to support growth

Forever 21 Inc wants to speed up its growth rate and in order to do that, it needs more money. Or so the fast fashion retailer is explaining to Wells Fargo & Co. and TPG, to whom it has turned to ask for a credit line to strengthen its productivity.

As reported earlier this week by the ‘Wall Street Journal’, Forever 21 fashion group is in talks with Wells Fargo & Co. and TPG to avail a 150 million dollars loan.

As stressed by many in the market, the decision of the retailer to go to “outsiders” to ask for money is quite rare among privately held companies.

It is a rare instance of the privately held company turning to outside investors to shore up its balance sheet. Forever 21 is still profitable but has struggled recently with a slowdown in Europe and a push into larger-size stores, which have dented its profitability, further reports ‘MarketWatch’, quoting anonymous sources close to the matter.

Forever 21 estimated its sales would increase 10 percent in 2015 to 4.7 billion dollars. However, there are reports that the company's sales and profit have narrowed.

RBC Capital Markets' analyst Brian Tunick estimates that the fashion retail store's sales have been negative for the last 12 months, publishes the ‘WSJ’.