Discount apparel chain Factory 2-U Stores Inc has voluntarily filed for Chapter 11 bankruptcy protection in order to restructure its finances and cut costs.

The San Diego-based company, which operates 243 stores, received a commitment for $45 million of debtor-in-possession financing from CIT Group Inc's CIT Group/Business Credit Inc and GB Retail Funding Llc, its senior lenders.

Despite the move, an official statement released on Tuesday said Factory 2-U's retail outlets will remain open and the company will continue normal business operations.

The company plans to use its funding, as well as cash flow from operations, to fulfil its obligations during the Chapter 11 process and maintain stock levels.

Meanwhile, the company's interim CEO Norman Plotkin and interim CFO John Swygert have been appointed to their respective positions on a permanent basis.