Rue21, the Retailer that Once Ruled the Malls, Files for Bankruptcy: Inside Its Third Chapter 11 Filing and What it Means for Shoppers

Rue21, a retailer that was once a mall staple, has filed for Chapter 11 bankruptcy protection. The company plans to close all its stores and sell all its intellectual property after struggling to continue operating. This marks the third time Rue21 has filed for bankruptcy. According to court documents filed in the U.S. Bankruptcy Court in the District of Delaware, the company will be implementing “going out of business” sales in its stores. Rue21 currently has about 540 stores across the U.S.

The news of Rue21’s bankruptcy filing is not surprising given the financial challenges it faced in recent years. Reuters reported that the company attempted to sell its business but did not secure a buyer willing to pay more than what it would earn by liquidating its inventory. Rue21 has accumulated approximately $194.4 million in debt, which contributed to its financial struggles.

However, Rue21 is not alone in facing financial troubles as corporate bankruptcies in the U.S saw a significant increase last year with bankruptcy filings jumping 58% from 179 in 2023 to 282 in 2033 according to Debtwire’s latest Restructuring Insights report . Catherine Corey, Debtwire’s global head of restructuring data stated that this spike indicates a shift in lenders’ attitudes as they are becoming less willing to support struggling companies due to various challenges such as post-pandemic withdrawal of government support, inflation, rising interest rates, supply chain disruptions, global unrest and stricter lending requirements.”