Fashion chain American Apparel has filed for bankruptcy. The brand has 20 stores in Ireland and the UK.
It says it has reached a deal with 95% of its lenders to reduce its debts.
American Apparel say that throughout this process, it will continue to operate its business without interruption.
The firm says it plans to recapitalise "through consensual pre-arranged Chapter 11 reorganisation" in the US.
It adds that the restructuring - which has been approved by the company's board of directors - will substantially reduce its debt and interest payments through the elimination of over US$200m (€178m) of its bonds in exchange for equity interests.
Paula Schneider, American Apparel CEO, said: "This restructuring will enable American Apparel to become a stronger, more vibrant company".
"By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy as we look to create new and relevant products, launch new design and merchandising initiatives, invest in new stores, grow our e-commerce business, and create captivating new marketing campaigns that will help drive our business forward".
American Apparel has approximately 9,000 employees and operates 227 retail stores in 19 countries.
