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Struggling teen retailer Forever 21 Inc. has reached an impasse in talks over a restructuring deal that would give its two largest landlords a stake in the company, according to people with knowledge of the situation.

The breakdown in negotiations with Simon Property Group Inc. and Brookfield Property Partners LP means the retailer is without a reorganization plan as it prepares for a bankruptcy filing, said the people, asking not to be identified discussing private negotiations. Going to court without a plan could delay and complicate the company’s turnaround efforts.

Forever 21, with about 600 U.S. stores, would be one of the largest retail bankruptcies yet in a year rife with them, and could leave landlords with millions of additional square feet of vacant space. U.S. retailers have closed 8,567 stores in 2019, according to a Sept. 27 report from Coresight Research, more than all of last year. While the parties initially discussed closing at least 100 Forever 21 locations, that number could now be higher, the people said.

Representatives for Forever 21 and Simon didn’t respond to requests seeking comment, while Brookfield declined to comment.

Forever 21 was aiming to file for bankruptcy with an agreement in place to give its landlords a stake in the company while allowing co-founder Do Won Chang to retain a share, Bloomberg earlier reported. Negotiations with the mall operators have included questions over ownership and leadership of the company during and after its restructuring, as well as which stores to shutter.

The talks among Forever 21, lenders and its landlords are evolving rapidly, and the outcome may still change, the people said.

The Los Angeles-based retailer is now headed into the biggest sales period of the year, when it’s essential to have well-stocked shelves and adequate staffing. Lenders watch holiday performance keenly, and a difficult season could weaken support from creditors and vendors.

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