Joining the latest in a long string of retailers, popular teen clothing store Rue21 says that it has filed for Chapter 11 bankruptcy. In a press release, the retailer stated that they are downsizing and paring down the company in an effort to “better align the size of its footprint with market realities, and focus on its hundreds of highly performing locations.” Rue21 reportedly intends on eliminating over 400 stores. That amounts to about a third of its overall physical locations, while keeping the focus on locations that are performing well.
Additionally, Rue21 intends on securing $175 million worth of financing to keep the company going, but this is subject to court approval. Rue21 may even consider closing even more stores in the coming future, depending on how the initial closures pan out. Rue21’s workforce of about 15,800 employees will also be affected, though exact numbers in relation to layoffs have not been released or discussed.
In the court filings, Rue21 cited a variety of reasons for this move and impacted sales. Among them of course is the ever-present competition of online sales, more affordable brands, and a change in demographics. It should be noted that this is not the first time Rue21 has experienced bankruptcy, having emerged from Pennsylvania Fashions’ 2013 bankruptcy.
Companies big and small, as well as consumers, use bankruptcy as a key strategy in starting fresh or restructuring their company. When used carefully and done with the help of an experienced bankruptcy attorney, filing for bankruptcy can be one of the greatest strategies one could employ.
If you or someone you know is considering filing for bankruptcy, contact a bankruptcy lawyer who can help. Contact the law offices of Joel R. Spivack to schedule your case consultation by calling 856-861-6203 or contact online today.