Forever 21 will close up to 350 stores globally after filing for Chapter 11 bankruptcy in the US.

The fashion retailer, which has only a few stores in the UK, noted that it will continue to operate in Mexico and Latin America.

Chapter 11 protection is similar to Company Voluntary Agreement (CVA) in the UK, delaying a US company’s financial obligations to creditors, giving time to refinance or sell parts of the business.

Forever 21 will close half of its stores, going from around 800 to fewer than 500.

The retailer said it had obtained $275 million from existing lenders, along with $75 million in new capital.

Executive vice president Linda Chang said this was a necessary step to secure the future of the company, enabling reorganisation and repositioning.

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