Struggling surfwear chain Pacific Sunwear of California Inc is preparing to file for bankruptcy, Bloomberg reported late on Monday, citing people with knowledge of the situation.

The company's shares fell as much as 70.4 percent to 10 cents in heavy trading on Tuesday.

Pacific Sunwear, which has posted annual losses since 2008, did not immediately respond to a request for comment.

The Chapter 11 filing could come as soon as next week, Bloomberg said, citing one of the people.

The situation remains fluid, and the timing could change, the report said.

A sluggish retail spending environment and increasing competition from fast fashion and online rivals have hurt U.S. clothing retailers, driving companies such as American Apparel Inc, Quiksilver Inc and Wet Seal Inc to file for bankruptcy.

Pacific Sunwear, which operates about 600 stores, had long-term debt of $97 million and $11.3 million of cash and cash equivalents as of October.