The initial round of closures includes 25 stores in California, Texas, other parts of the Southwest and in the Northwest. When the cutting is done a few months from now, 41 of the company's 98 stores will have been closed and more than 100 Krause workers will be furloughed.

The California stores include outlets in Chula Vista, La Mesa, LA, Montclair, Palm Desert, Sacramento, Santa Clarita and Van Nuys. Other major markets that will see closures include Dallas-Ft. Worth, Houston, Atlanta, Chicago and Portland, OR.

When it filed for bankruptcy last month, Krause said it had enough money to stay in business through the end of September as it attempts to reorganize, potentially through a management buyout. If the buyout doesn't go through or another buyer isn't found by Sept. 30, the company plans to cease operations and liquidate.