Popular clothing retailer files for bankruptcy, will close all 500+ stores

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1. Business

• Updated: May. 03, 2024, 1:04 p.m.|
• Published: May. 03, 2024, 6:30 a.m.

rue21 store at Capital City Mall in Lower Allen Township. November 18, 2021. Dan Gleiter | dgleiter@pennlive.com

Rue21, a specialty fashion retailer of apparel and accessories, has filed for Chapter 11 bankruptcy and will close all of its stores.

The Allegheny County-based clothing retailer filed for bankruptcy on Thursday in the United States Bankruptcy Court for the District of Delaware.

The company said in the bankruptcy filing it has between $100,000,001 - $500 million in estimated assets. But, it has $194.4 million in debt, according to Reuters.

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In the bankruptcy filing, Rue21 said it recently "suffered operational losses stemming from, among other things, underperforming retail locations, the continued growth of online shopping and industry competition, inflation and macroeconomic headwinds, and difficulties raising capital in an amount sufficient to meet their liquidity needs and fund operations."

Rue21 said that proposals to purchase its assets would not exceed the projected proceeds that would be realized by conducting the store closure sales.

Rue21 also plans to sell its intellectual property.

The closing sales are expected to take place over the next four to six weeks.

Rue21 has more than 540 stores across the United States including 21 locations in Pennsylvania. The company has locations at the Colonial Park Mall in Lower Paxton Township, at Tanger Outlets Hershey in Derry Township, and at the Capital City Mall in Lower Allen Township The store at the Colonial Park Mall opened in 2014. The store at the Capital City Mall opened in 2021.

The Pennsylvania-based retailer, which previously filed for bankruptcy in 2003 and 2017 has approximately 4,900 employees and at its peak, it had 1,000 stores in the United States, according to Reuters.

Rue21 is a fashion-forward casual apparel retailer focused on teenagers; and sells clothing, accessories and shoes among other items.

As of early Wednesday morning, Rue21′s homepage was down.

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