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Rue21 Bankruptcy: 3 Things to Know About the Struggling Teen Retailer


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Teen-focused rue21, inc.  (NASDAQ: RUE ) is the latest retailer to file for bankruptcy protection, according to a company announcement late last night. The specialty apparel merchant said it made the move to reduce debt and focus on best performing stores.

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Cranberry, Pa.-based RUE currently has 1,179 stores mostly in shopping malls across the U.S. The company said it will continue operating stores during the Chapter 11 bankruptcy proceedings. Last month, rue21 started closing as many as 400 stores. In its latest announcement, it said additional closings are under consideration. The company listed its assets and liabilities in the range of $1 billion to $10 billion.

RUE joins a growing list of retailers that have filed for bankruptcy so far in 2017, including The Limited, Hhgregg, RadioShack, BCBG, Wet Seal, Gormans, Payless ShoeSource, Eastern Outfitters, and outdoors apparel and equipment merchant Gander Mountain.

The retailer said it has reached agreements to obtain up to $125 million in debtor-in-possession (DIP) financing from its existing lenders, and as much as $50 million in new money term loan DIP financing from a group of its existing term loan holders.

As InvestorPlace contributor Josh Enomoto commented earlier this month , the retail industry is suffering from a bifurcated dynamic. "On one hand, the e-commerce sector is on a roll. On the other, traditional brick-and-mortar stores are hit with a dearth in foot-traffic. That has plagued formerly prominent retail stocks, moving some to the brink of bankruptcy."

He identified four other retailers on the verge of bankruptcy: "big and tall" apparel merchant  Destination XL Group Inc (NASDAQ: DXLG ); department store operator  Bon-Ton Stores Inc (NASDAQ: BONT );  Bebe Stores, Inc . (NASDAQ: BEBE ); and, perfume and fragrances seller  Perfumania Holdings, Inc . (NASDAQ: PERF ).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Stocks
Referenced Symbols: DXLG , BEBE ,


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