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Clothing giant Forever 21 explores restructuring in the midst of retail concerns

Pedestrians pass a Forever 21 store in New York.

Scott Mlyn | CNBC

Forever 21 is reviewing restructuring options to bolster its liquidity as the fast-fashion giant struggles with its business.

The company is in talks with the private equity firm Apollo Global Management on the inclusion of debtor-in-possession funds to provide funding should it file for bankruptcy, the person said. The person warned that no decisions had yet been made.

Talks are taking place as the apparel industry continues to struggle with major changes, including the relocation of more online shopping. Many of the most problematic retailers, such as Forever 21

, are in shopping malls where fewer buyers spend their money. With declining sales, companies are still burdened by large, expensive stores, even though retailers must invest in technology to defend themselves against the competition from new online-born brands like Lulus.

Forever 21 has more than 815 stores in the US and worldwide.

Retailer retailers were particularly affected by the upheavals in retailing. Some of them have filed for bankruptcy in recent years, including Aeropostale, Rue21 and American Apparel.

Last week, many clothing retailers scored a poor result, which has not been so disappointing since the Great Recession. According to a Retail Metrics analysis, apparel retailers' results dropped 24% in the first quarter. The last time the group's profits were so bad was the first quarter of 2008, when they fell 40%, Retail Metrics said.

The person requested anonymity because the information is confidential. A spokeswoman for Forever 21 told CNBC that the company "talks to our lenders in the normal course of business and keeps all our agreements and continues to work as usual." Apollo declined to comment.

Bloomberg first reported on Monday the exploration of the restructuring.

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