US fashion retailer Forever 21 said on Sunday it has filed for chapter 11 bankruptcy protection in order to restructure its business.
The company said it plans to exit most of its international locations in Asia and Europe but will continue operations in Mexico and Latin America.
The company has roughly 800 stores globally and plans to close between 300-350 stores, a spokesperson told Euronews.
“This was an important and necessary step to secure the future of our Company, which will enable us to reorganize our business and reposition Forever 21,” said Linda Chang, Executive Vice President of the fast-fashion retailer that caters to teenagers.
The company said it obtained $275 million in financing from its existing lenders with JPMorgan Chase Bank and $75 million in new capital from TPG Sixth Street Partners in addition to affiliated funds.
"With this capital, Forever 21 intends to operate in a business as usual manner, honoring all Company policies, including gift cards, returns, exchanges, reimbursement and sale purchases," a company statement said.
It lists both assets and liabilities in the range of $1 billion to $10 billion, according to the court filing in the U.S. Bankruptcy Court for the District of Delaware.
As part of the bankruptcy filing, the company requested approval to close up to 178 stores across the US, but they do not expect to exit any major markets in the US, a spokesperson told Euronews.
Chapter 11 of the US Bankruptcy Code is used to reorganise a business. Significant business decisions are made by a bankruptcy court.
The company joins a growing list of retailers filing for bankruptcy protection who have taken a hit from e-commerce competition.