Fashion retailer Forever 21 has filed for Chapter 11 bankruptcy protection in the US.
The company said it plans to “exit most international locations in Asia and Europe” but would continue to operate in Mexico and Latin America.
It expects to close up to 350 stores worldwide, a spokesperson said, including as many as 178 US stores.
Forever 21 sells inexpensive, trendy clothes and accessories, and competes against brands such as Zara and H&M.
But some analysts say the retailer, founded in 1984, has lost its way over the past five years, and fallen out of favour with young US shoppers looking for relatively cheap clothing.
The company has also, like many traditional retailers, struggled against rising competition from online rivals.
Chapter 11 protection postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.
A Forever 21 spokesperson said the retailer expected to have between 450 and 500 stores globally after this process, down from its current total of about 800.
Forever 21 had announced last week that it would pull out of Japan by October due to “continued sluggish sales”.
The California-based firm has now said it is seeking to close up to 178 stores across the US, but has provided few details on other markets.
“Decisions as to which international locations will be closing are ongoing. We do not expect to exit any major markets in the US,” the spokesperson said.
The retailer sought to reassure its customers in a public letter on Sunday, saying “stores are open” and “it will continue to feel like a normal day”.
“This does not mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future.”