U.S. teen fashion retailer Rue21 Inc. has filed for chapter 11 protection in the Western District of Pennsylvania bankruptcy court, Reuters reported today. The retail chain, which sells budget-priced clothing and accessories at over 1,100 stores across the U.S., listed assets and liabilities in the range of $1 billion and $10 billion. Rue21 has entered into a restructuring support agreement with certain stakeholders and expects to continue normal operations throughout the chapter 11 process. It has also reached agreements to obtain up to $125 million in debtor-in-possession (DIP) financing from existing lenders, and up to $50 million in new money term loan DIP financing from a group of its existing term loan lenders. Rue21 said the new financing "will support day-to-day operations during the reorganization,” adding that they may evaluate additional store closures, apart from the planned 400 store closures it began last month. Rue21 is the latest in a long line of retailers filing for bankruptcy as shoppers shift their spending online.
