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The chain said it will file a motion to close up to 178 of its more than 800 stores, though it said in a letter to customers that "the decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords."
"We do however expect a significant number of these stores will remain open and operate as usual, and we do not expect to exit any major markets in the U.S.," the company said.
The ability to get out of leases and close stores at lower cost is a key advantage that the bankruptcy process affords to retailers.
Forever 21 is the latest retailer to run into trouble amid the ascendancy of online shopping that has cut foot traffic to malls and brick-and-mortar stores. High debt levels and rent costs have also burdened traditional retailers.
"Retailers relying on debt to finance their growth have always been particularly susceptible to slowdowns," said Greg Portell, lead partner in the global consumer and retail practice of retail consulting firm A.T. Kearney.
Further retail shutdowns are expected to pile up and may reach 12,000 by the end of 2019, Coresight predicts.
Forever 21 was founded in 1984 in a small Los Angeles store by South Korean immigrants Do Won Chang and his wife, Jin Sook. The chain expanded quickly in suburban malls, and catering to young girls and women with a mix of inexpensive basics. The company perfected the fast-fashion model, drawing in customers with its frequently updated mix of clothes than what was offered at department stores or single brands.
Traditional brick-and-mortar retailers that specialize in selling clothes to teens and young adults have struggled in recent years, as fashion cycles shorten and younger buyers shift from the mall to online purchases.
"The combination of fast fashion and accelerating supply chain speeds have exacerbated that risk by increasing the chances that a retailer reads the trends wrong and misses multiple trend cycles," said Portell.
Many retailers have run into trouble after being purchased by private equity firms or hedge funds, which piled on debt. Forever 21, by contrast, is still owned by its founders.