By
Bloomberg
Published
May 2, 2024
Teen clothing retailer rue21 has filed bankruptcy and will attempt to sell itself, marking the third time the business has sought court protection and the latest sign of trouble for mall-based outlets.
The retailer, which is majority owned by Blue Torch Capital, filed Chapter 11 Thursday in Delaware listing assets and liabilities each of between $100 million and $500 million. The company said in court papers that it will market itself and pursue a potential sale with any interested parties.
The chain previously filed Chapter 11 in 2017 and 2002 under the name Pennsylvania Fashions. Headquartered outside of Pittsburgh, rue21 operated roughly 600 stores in 45 states, according to a December statement.
The latest bankruptcy filing comes after the retailer overhauled its executive leadership in 2023. In March, rue21 announced the appointment of Chief Executive Officer Josh Burris and in December appointed Chief Financial Officer Michele Pascoe. Burris had previously served as the head of vitamin retailer GNC Holdings Inc. following that chain’s restructuring in 2020.
Last year, rue21 also worked with with AlixPartners LLP for operational help after racking up earnings losses, Bloomberg News reported at the time. The retailer’s 2017 bankruptcy was initiated after rue21’s sales were hurt by falling foot traffic and changing consumer spending habits.
Rue21 entered into negotiations with its lenders to avert a bankruptcy filing in October 2022.
Several mall-based retail chains have filed Chapter 11 in recent years to close stores and restructure. Express Inc. filed bankruptcy in April and said it could be forced to liquidate if it can’t complete a buyout relatively quickly.
The case is New rue21 Holdco Inc., number 24-10939, in the US Bankruptcy Court in the District of Delaware.