Cranberry Teen Clothing Retailer Rue21 Files For Bankruptcy

CRANBERRY TOWNSHIP, PA - Struggling Cranberry-based teen clothing retailer rue21 has filed for Chapter 11 bankruptcy protection less than a month after announcing it was closing 400 stores nationwide.

The retail chain listed assets and liabilities in the range of $1 billion and $10 billion, according to the filing in the Western District of Pennsylvania Bankruptcy Court.

Rue21 has entered into a restructuring support agreement with certain stakeholders and expects to continue normal operations while in Chapter 11, the company said. But rue21 officials added that additional store closures could be in the works.

“These actions are being undertaken with the goal of strengthening the company’s balance sheet, achieving a more efficient cost structure, and concentrating resources on a tighter retail footprint in order to pave the best path forward for rue21,” Melanie Cox, rue21 chief executive officer, said in a statement. “Looking ahead, I am confident that the outcome of this process will be a stronger and more sustainable rue21 for our customers, vendors and business partners.”

This isn’t the first instance rue21 has experienced difficulties. Then known as Pennsylvania Fashions Inc., the company filed for Chapter 11 bankruptcy protection in 2002.

Debtwire reported last month that the company, purchased in 2013 by global private equity firm Apex Partners, was struggling to meet it financial obligations. The company currently operates about 1,100 stores nationwide.

Rue21’s difficulties are the latest in what is proving to be a dismal 2017 for traditional brick-and-mortar retailers as more consumers purchase products online. Among the retailers who have announced a significant number of store closures this year: Macy’s, Sears, Kmart, Payless ShoeSource, Abercrombie & Fitch, American Apparel and Guess.

Photo by Mike Mozart via Creative Commons.