Four weeks after announcing the closure of 400 stores, one-third of its portfolio, Rue21 has filed for Chapter 11 bankruptcy protection.
The latest in a long line of retail bankruptcies filed this year that surpass bankruptcies filed during the Great Recession, the teen retailer filed for protection Monday to reduce debt and restructure its remaining stores for better performance, the company said in a release.
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Pending approval of the bankruptcy court in Western Pennsylvania, Rue21 is looking to secure $175M in financing to stay in business. The Warrendale, Pennsylvania, chain will maintain operations as normal during the proceedings.
Rue21 has 1,179 stores, though the retailer said it is managing its real estate portfolio to evaluate the need for more closures, in addition to those already announced.
“These actions are being undertaken with the goal of strengthening the company’s balance sheet,” Rue21 CEO Melanie Cox said in a statement. “Even in a challenging environment, we are fortunate that Rue21 has highly relevant brands, an enthusiastic and loyal customer base and hundreds of highly performing stores.”
Other U.S. retail chains that have filed for bankruptcy this year include electronics retailer HHGregg, discount shoe chain Payless Inc. and apparel chains The Limited and Wet Seal.
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