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Simon Property Group has bought a stake in bankrupt Forever 21, expands retail footprint

Indianapolis-based Simon Property Group has acquired a stake in the bankrupt fast fashion retailer Forever 21, according to a deal finalized Wednesday.

Simon purchased the chain as part of an ownership group that includes New York City-based Authentic Brands Group (ABG) and Bermuda-based commercial real estate firm Brookfield Property Partners.

Under the terms of the deal, both Simon and ABG, a brand development, marketing and entertainment company, will each own a 37.5% stake in the company. Brookfield will own 25% of Forever 21's intellectual property and operating business. The purchase price was not disclosed.

The acquisition of Forever 21 follows Simon's announcement earlier this month that it is buying rival Taubman Centers Inc. for $3.6 billion. The purchase expands Simon's retail footprint in the United States and Asia at a time when struggling retailers are routinely shuttering locations.

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Forever 21 filed for bankruptcy in September and said it would close up to 178 U.S. stores, including three in Indiana. The locations at Circle Center Mall and Castleton Square Mall were not listed as possible closures, but stores in Carmel, Plainfield and Evansville were on the chopping block.

This isn't the first time Simon has helped a purchasing group bail out a troubled retailer. In 2016, the company joined an ownership group that included General Growth Properties, now owned by Brookfield, to buy teen clothing brand Aéropostale Inc., for $243.3 million, according to reports published at the time.

In its news release, ABG said Forever 21's new ownership structure is similar to that of the Aéropostale acquisition. The structure is intended to position Forever 21 for long-term growth.

The new ownership group will oversee the continued operations of the chain's Los Angeles headquarters and its online business, according to the news release. It will also work to expand Forever 21 across key territories in Europe, Asia, South America and Middle.

Forever 21-owned operations in Central America, the Philippines, Mexico, South America and the Caribbean will shift to a license partnership model.

Contact IndyStar reporter Alexandria Burris at aburris@gannett.com or call 317-617-2690. Follow her on Twitter: @allyburris.