Warrendale, Pa. — Teen apparel retailer Rue21 filed Chapter 11 bankruptcy on Monday, May 15 with plans to reorganize and restructure its assets and debts.
In April, the company began to close approximately 400 underperforming stores of the 1,179 stores that it operates. The company stated Monday that it may evaluate further store closures as it continues to manage its real estate lease portfolio. The company expects to emerge from Chapter 11 in fall 2017 with a significantly deleveraged balance sheet. The company has obtained $125 million in debtor-in-possession financing, enabling it to continue day-to-day operations, including payment of employee wages, payment of vendors and honoring customer programs, such as gift cards. Kirkland & Ellis LLP is Rue21’s legal advisor, Rothschild Inc., as its investment banker and financial advisor and Berkeley Research Group as its restructuring advisor.