Forever 21 has officially announced plans to file for Chapter 11 bankruptcy protection. The fast fashion retailer obtained $275 million in financing from its existing JPMorgan Chase lenders as well as $75 million new capital from TPG Sixth Street Partners in order to continue operations. Forever 21 has requested approval to close up to 178 U.S. stores and up to 350 in total worldwide.

The private company announced they intend to operate “business as usual” in stores and online, and do not expect to exit any major markets in the U.S. According to Chain Store Guide’s database of Apparel Specialty Stores, Forever 21 operates 549 store locations in malls and lifestyle centers across 46 U.S. states and Canada.

For the last decade, Forever 21 has been a regular in the Top 50 companies ranked by total stores in the apparel industry. However, the company’s challenges in recent years include over-expansion, increased competition from discounters and the rise in popularity of online shopping, rental retail and secondhand sites. It was only in the year 2000 when Forever 21 had just less than 100 stores. This type of rapid expansion can go either way. We have seen this before, a company expands too much too fast and is not able to create the sales they projected.

The chain is taking a big risk by acquiring new capital. At this point it is all or nothing and Forever 21 has to make this work. Companies entering Chapter 11 tend to take measures to identify new opportunities, eliminate underperforming assets and attempt to reinvent themselves. Based on our industry expertise, they are going to be making big changes, which may include finding new vendors. Chain Store Guide suggests suppliers for Forever 21 start broadening their client base should the retailer decide to change its sourcing or not recover from the restructuring. Our database of Apparel Specialty Stores profiles over 500 leading chains that also sell apparel and accessories to young men and women. In addition, this situation may create opportunities for new manufactures to reach the Buyers at Forever 21 as they look to ‘revitalize the brand and fuel their growth’ in the coming months.