Fashion retailer Forever 21 has filed for 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 South America.
The firm expects to close up to 350 stores worldwide, including as many as 178 stores in the US.
The company filed bankruptcy under Chapter 11, which means the company would restructure or reorganise its debts or sell parts of the business. In short, it gives the firm a fresh start keeping the best possible interest for creditors.
The firm said it has obtained $275m (£224m) in financing from existing lenders and $75m in new capital.
Forever 21 sells inexpensive, trendy clothes and accessories, and competes against brands such as Zara and H&M.
Analysts say the retailer, which was founded in 1984 lost its way over the past five years, and fallen out of favour with young US shoppers looking for relatively cheap clothing. The retailer is also struggling to fight competition from online rivals.
At the moment Forever 21 has about 800 stores worldwide and the retailer expects to cut it between 450 and 500 stores globally after this process.