Fashion and accessories retailer Rue21 filed for bankruptcy protection late Monday after its budget-conscious customers migrated to fast-fashion competitors and nimbler online sellers, closely resembling the struggles of other mall chains.
Rue21 filed for bankruptcy protection in a Pennsylvania court. The retail chain has listed its assets and liabilities in the range of $1 billion and $10 billion, according to Monday’s court filing.
The company expects to continue business operations as usual as the bankruptcy process unfolds, according to a Monday news release. It may consider closing more stores before the process is over, the release said.
Financing of up to $175 million from several lenders will allow rue21 to continue to pay for ongoing operations, such as paying employees and vendors and honoring gift cards.
“The restructuring will help rue21 make its transition into “a more focused and highly performing retailer,” the release said.
“These actions are being undertaken with the goal of strengthening the company’s balance sheet, achieving a more efficient cost structure, and concentrating resources on a tighter retail footprint in order to pave the best path forward for rue21,” company CEO Melanie Cox said in the release.
Rue21 is the latest in a long line of retailers filing for bankruptcy as shoppers shift their spending online. In April, discount shoe retailer Payless ShoeSource filed for bankruptcy and planned immediate closures of 400 of its over 4,000 stores worldwide.