Reports about Forever 21 readying to file for Chapter 11 bankruptcy protection has been denied by the U.S fashion retailer.

 ‘The reports are inaccurate; Forever 21 is not planning to file for bankruptcy on Sunday,” a statement by the company said.

According to fashion news, the F21 stores will remain open and operations will continue in the vast majority of stores in the U.S and other international stores.

On Wednesday, The Wall Street Journal reported that the company may soon file a bankruptcy petition and close some of its 700 stores.

Previously, Bloomberg had also reported that Forever 21 has appointed advisers to plan out the restructuring of debt and is in talks with possible lenders but they have not progressed well.

Chapter 11 bankruptcy protection enables companies the cushion to reorganize a venture than making a fresh start. It also helps in closing loss-making stores and slashes loans.

The recent example is discount merchandise retailer and pharmacy chain Fred's that filed for Chapter 11 bankruptcy to close all of its stores.

Fred’s plans for a merger with pharmacy giants Walgreens Boots Alliance and Rite Aid failed in 2017 over issues of antitrust concerns.

Store closures very high this year

This year, bankruptcies and store closures have surpassed the previous year. In the 9 months of 2019, store closings are more than 40 percent than the whole of 2018, according to Coresight Research, an international marketing research firm.

Forever 21, has an average annual sales of $3 billion. The downturn, despite the large footprint of 800 stores across the globe is attributed to the impact of online shopping as one of the factors.

In the fashion retail sector, many retailers have filed for bankruptcy. This contrasts with the business boom enjoyed by online retailers like Amazon.

The affected retail players include Aeropostale, Nine West, Claire’s, Toys R Us, Diesel, Gymboree, and Kiko USA among others.

As a fashion house, the Forever 21 brand is considered the go-to place for shoppers to get the best deals in the latest fashion.  The brand has been one of the favorites of millennials including young women for its chic range of clothing.  Forever 21 Here, a Forever 21 store is pictured on August 8, 2014, in Chicago, Illinois. Photo: Getty Images

Interestingly, a McKinsey report calls 2019 as the year of awakening for fashion players. It means they must anticipate external shocks and never take growth for granted.

McKinsey sees a sector growth of 3.5 to 4.5 percent this year, a tad lower than in 2018.

Fashion retail continues to be a happening place and labels such as Fashion Nova, Everlane, American Apparel continue to expand.