Gadzooks Inc. (Carrollton, Texas) has entered into an agreement to sell its assets, including the leases for 243 stores, to an affiliate of Forever 21 Inc. (Los Angeles), a specialty retailer of apparel and accessories for fashion-oriented women with over 200 retail stores.
Gadzooks, the teen apparel retailer that entered bankruptcy in February 2004, announced plans last month to sell off its assets in an auction sanctioned by the U.S. Bankruptcy Court in Dallas. Forever 21's winning bid was valued at about $33 million. The deal is slated to close on March 11.
“We are very thankful for the opportunity to build upon the strong brand created by the Gadzooks team,” says Don Chang, founder and ceo of Forever 21. “In particular, the Gadzooks team has recently generated sales momentum that impressed us. Coupled with Forever 21's fashion capabilities, we look forward to working together to build an even stronger brand.”
Gadzooks was founded in 1983 and enjoyed success in the 1990s. The chain of mall stores struggled with the fast-changing teen market, however, and after a string of modestly profitable years, lost $1.3 million in 2003 and $62 million in 2004.