The fashion chain, established in 1984, has been in negotiations with financial advisers and lenders in wake of unprofitable stores and dwindling cash reserves, according to a report from Bloomberg.
A last-ditch effort to restructure its debt may keep the company from filing Chapter 11, Bloomberg reported.
There are 600 Forever 21 stores in the U.S. and additional operations in Canada, Asia, Europe and Latin America.
Should it go into bankruptcy, Forever 21 would be the latest clothing retailer to file for Chapter 11 protection.
Lord & Taylor, one of America’s oldest department stores, closed its flagship New York City store earlier this year. The brand was just sold to a rental clothing company Le Tote Inc. for $100 million—after struggling financially as more people shop online.