(WJET/WFXP) — Rue21, a teen apparel company headquartered in Warrendale, Pennsylvania, filed for Chapter 11 bankruptcy Thursday.
According to the filing, the company is planning to close all stores while conducting large-scale “going out of business” sales. All 543 stores are expected to be closed within the next two months.
Along with the closure of all of the brick-and-motor stores in the nation, Rue21 plans to liquidate all of its intellectual properties and intangible assets.
The company citing over $194 million in outstanding borrowings, citing negative impacts from the COVID-19 pandemic and a shift in shopping patterns from brick-and-mortar to online. Along with this, additional operational losses have been accrued due to underperforming retail locations, increased industry competition as well as rising inflation.
While the company continues to generate revenue, it is insufficient to meet their long-term liquidity needs and working capital requirements.
Rue21 is the successor to Pennsylvania Fashions Inc. which, after filing Chapter 11 in 2003, changed its name to Rue21. They quickly became a household name, gaining large popularity through the late 2000s and early 2010s. The company had over 1,000 stores in 2014. In 2017, Rue21 filed for Chapter 11 after encountering issues with their dependency on physical in-store shopping, leading to the closure of 400 stores nationwide.
