CRANBERRY, Pa. – Pennsylvania-based teen clothing retailer rue21 is restructuring and filing for Chapter 11 bankruptcy protection about a month after the announcement it would close about 400 stores to focus on online sales.
The company announced last month that the shuttering of the stores, which with more than 700 stores in 48 states.
The company, based in Cranberry, north of Pittsburgh, announced Tuesday that its bankruptcy filing will accompany the agreements with lenders to restructure some debt and obtain more capital.
The company says that it could wind up closing more stores before it emerges from bankruptcy in the autumn.
A federal judge must approve the Chapter 11 plan in which up to $175 million in funding from various lenders. That money will help the company to pay employees, suppliers, and honor gift cards.