CRANBERRY, Pa. — Teen clothing retailer rue21 is restructuring and filing for Chapter 11 bankruptcy about a month after announcing it would close some 400 stores, including one at the Hagerstown Premium Outlets, to focus more on online sales.
In a news release posted on its website, the retailer announced it has entered into agreements with some lenders to reduce its debt and provide additional capital to support its restructuring.
In April, the company announced it would close stores at Hagerstown Premium Outlets and at Francis Scott Key Mall in Frederick.
Several other area stores, including ones at the Valley Mall in Halfway, at Chambersburg Crossing in Pennsylvania and at the Apple Blossom Mall in Winchester, Va., were to remain open.
The company previously had a store in the former Martinsburg Mall.
In total, the retailer reported it was shuttering nearly 400 stores, leaving it with more than 700 stores in 48 states.
The bankruptcy announcement said the company "may evaluate additional store closings as it continues to manage its real estate lease portfolio."
The retailer expects to continue normal business operations throughout the process.
A federal bankruptcy judge must approve the Chapter 11 plan. The company anticipates emerging from bankruptcy proceedings in the fall, the release said.
Up to $175 million in financing from various lenders will help support day-to-day operations during the reorganization, including continuing employee wages without interruption; paying vendors for goods and services provided on or after the filing date; and honoring existing customer programs, including gift cards.