Retailer Express Inc. is asking its lenders for funds to help finance a potential Chapter 11 bankruptcy process, according to people with knowledge of the plans.

Express, which sells mid-priced apparel, has been burning through cash as it attempts to fix its troubled operations.

Express may file for bankruptcy as soon as next week, but the preparations aren’t final and plans could change, said the people, who asked not to be identified because negotiations are private.

A representative for the company declined to comment on the discussions.

Bankruptcy allows companies to shed expensive leases and continue operating, or quickly find a buyer. Express, which was once a top destination for Millennials dressing for both the office and the club, burned through more than $200 million during its 2022 fiscal year.

Its finances have suffered as it struggled to align with changing consumer tastes and competed with ultra-fast fashion powerhouses like Shein, Temu and Boohoo, which rapidly churn out new styles.

Express shares have tumbled more than 80 percent this year, leaving it with a market capitalisation of just $5.3 million against a debt load of nearly $300 million. The Columbus, Ohio-based chain operates more than 500 full-price and outlet locations.

By Reshmi Basu and Eliza Ronalds-Hannon

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The Fashion and Management Missteps That Left Express Clinging to Solvency

The retailer has struggled to keep pace with the times and has occupied an increasingly untenable spot: not prestigious enough to compete with the luxury brands, yet too expensive to go head-to-head with rapidly growing low-cost rivals.