( WJET/WFXP ) — Rue21, the teen apparel company, filed for Chapter 11 bankruptcy on Thursday.
According to the filing, the company, headquartered in Warrendale, Pennsylvania, plans to close all stores while conducting large-scale “going out of business” sales. All 543 U.S. stores are expected to be closed within the next two months, according to court documents.
Rue21 has three stores in Acadiana, in the Acadiana Mall, at 3001 Louisiana Avenue in Lafayette and at Lagniappe Village in New Iberia.
Along with the closure of all its brick-and-mortar stores, Rue21 plans to liquidate all its intellectual properties and intangible assets.
The company said contributing factors were 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. In addition, operational losses have been accrued due to underperforming retail locations, increased industry competition and rising inflation.
‘Don’t Give Up The Ship’ U.S. Brig Niagara won’t sail in 2024 While the company continues to generate revenue, it is insufficient to meet its 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.
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The company had over 1,000 stores in 2014. In 2017, Rue21 filed for Chapter 11 after encountering issues with its dependency on physical in-store shopping, leading to the closure of 400 stores nationwide.
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