The fashion chain American Apparel filed has for bankruptcy protection in the US but said that its overseas shops would not be affected by the move.
The American Apparel shop in North Street, Brighton, is one of 18 outlets in Britain and 260 around the world.
The company – famed for its “Made in Downtown LA” clothing – has reached a deal with almost all of its lenders, it said.
They will write off about $200 million (£130 million) of bonds in exchange for equity in the business.
The result will be to shrink American Apparel’s $300 million debt to no more than $135 million and cut annual interest payments by $20 million.
The board signalled in August that the company had financial problems with widening losses and cash flow concerns.
It has faced challenges from the company’s Canadian founder Dov Charney who set up the business 26 years ago after he dropped out of college and borrowed $10,000 from his father. He floated the company eight years ago.
But just under a year ago the board sacked Mr Charney after accusing him of sexual misconduct. He sued the board for defamation.
Four months ago American Apparel was granted a restraining order preventing Mr Charney from attacking the company in the media and trying to oust its directors.