Clothing retailer Forever 21, with three Central Massachusetts locations, has filed for Chapter 11 bankruptcy and could close as many as 178 U.S. stores and more than 300 overall.
The company based in Los Angeles, announced its restructuring plan Sunday, which calls for a wind down of most of its operations in Asia and Europe with operations continuing in Mexico and Latin America.
The chain has secured $275 million in financing from its existing lenders and $75 million in new capital it will use to continue operations during the bankruptcy process and downsize its store base to focus on profitable locations.
In filings, the company said it has $227.7 million in outstanding debt.
International stores were largely the culprit for the company’s financial issues, with global sales dropping from $4.1 billion in 2014 to $3.1 billion in the 12 months ending in July 2019.
The company’s stores in Canada, Europe and Asia are losing about $10 million per month over the last year, according to filings.
Closing 178 stores would still leave the company with 371 U.S. stores. Locally, the chain operates locations in the Auburn Mall, Solomon Pond Mall and Natick Mall. A list of proposed store closings was not immediately available.
The bankruptcy process means the company will abandon future store openings planned in Burlington, Braintree, Providence and Portland.
