Fast-fashion retailer Rue21 Inc. will close 400 of its 1,179 stores, including one in the Tri-Cities, as it moves to restructure.
The company filed for protection from creditors under Chapter 11 in U.S. Bankruptcy Court for Western Pennsylvania on Monday.
Tri-City employees said Rue21, based in Warrendale, Penn., will close its Richland store at Vintner Square at Queensgate while keeping the Kennewick store at Colonnade Shopping Center, 6807 W. Canal Drive.
Gordon Brothers Retail Partners LLC was hired to liquidate inventory and fixtures at the closing stores. The process will continue until at least July, according to court documents.
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In tandem with its petition, Rue21 sought court approval to obtain up to $175 million in new financing, including $50 million in capital to operate the business during the restructuring. The bankruptcy is being jointly administered with those of Rue21 affiliates, Rhodes Holdco Inc., R Services LLC and Rue Services Corp.
In its petition, Rue21 said it has between 25,000 and 50,000 creditors. It said it has assets and liabilities that fall between $1 billion and $10 billion in its bankruptcy petition.
Wells Fargo Bank in Portland is Rue21’s largest unsecured creditor with a $239.2 million claim against the retailer. The other leading unsecured creditors are Mark Edwards Apparel Inc. of Montreal ($21 million) and Wells Fargo Capital Finance ($10.5 million).