Rue 21 Joins Other Declining Teen Brands in Bankruptcy
On Tuesday morning, teen specialty retailer Rue21 became the latest to succumb to bankruptcy, filing in the Western District of Pennsylvania with a restructuring support agreement to scale down its debt from lenders holding 96.8% of its secured term loan, bondholders holding 60.2% of its outstanding unsecured notes and its majority shareholder. Under its proposed reorganization plan, the debtor will give its term loan lenders, owed $521 million, 96% of reorganized equity.
The company's filing comes behind several other retailers looking to scale down their debt and store footprint in Chapter 11, amid the heightened pressures on the industry, which include dwindling mall traffic, the rising cost of wages and rent and the increased pressure from e-commerce.
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This article was written by a staff member of TheStreet.
