Christchurch Mayor Bob Parker says Lane Walker Rudkin being placed in receivership is a huge blow for the city.
BDO Spicers were appointed receivers and managers on Tuesday.
In a statement, Brian Mayo Smith and Stephen Tubbs said there had been a significant deterioration in the group's overall financial position and receivership was unavoidable.
The New Zealand Herald says Lane Walker Rudkin owes more than $50 million.
LWR employs about 470 people at clothing factories in New Zealand and Australia: more than 200 work at the Christchurch plant. Other plants are in Wairarapa, Timaru, and Brisbane.
Mr Parker says he hopes the receivers can find a way to keep LWR running.
The receivers say no decisions have been made about trading operations, but they hope to make more information available shortly.
The National Distribution Union wants the receivers to keep trading to protect jobs.
The union says it is a tragedy the company did not explore options such as a nine-day fortnight before it got too far into debt.
Lane Walker Rudkin was established more than 100 years ago.
Timaru district Mayor Janie Annear says the community is prepared for redundancies at the Lane Walker Rudkin plant there.
However, she says there is resilience within the town to face tough times and companies are still hiring staff.