- Rue21 has employed the advising agency Ducera Companions for assist with a potential restructuring after earnings fell this yr, based on a report from The Wall Road Journal’s Professional Chapter publication that cited nameless sources.
- The corporate is attempting to keep away from a Chapter 11 submitting, based on the report, which additionally famous that Rue21 is in talks to boost financing. A spokesperson for Rue21 wouldn’t touch upon the small print of the report however advised Retail Dive in an emailed assertion, “We routinely work with advisors as we consider strategic choices.”
- Rue 21 filed for and emerged from chapter in 2017. In late 2020, the teenager attire retailer introduced it was increasing its retailer footprint with its gross sales trending up.
Rue21 was a fast-growing teen retailer within the early 2000s, with a scorching model that would compete in opposition to different robust gamers within the house like H&M and Eternally 21.
After a swift enlargement, and taking over a big debt load in a personal fairness buyout, the retailer bumped into the mall retail doldrums of the mid-2010s. Rue21 was half of a giant cohort of mall-based retailers to go bankrupt in 2017. It emerged that very same yr, after closing greater than 400 shops and turning possession over to its lenders.
In late 2020, the retailer mentioned it deliberate to open 15 new shops — after a yr when the market noticed a high-water mark in retail bankruptcies and retailer closures with the onset of the COVID-19 pandemic and its early, turbulent months.
Rue21’s chief monetary officer mentioned on the time that the retailer was beating its personal expectations and rising its comparable gross sales yr over yr. It was additionally in a position to retire debt whereas rising availability beneath its asset-based facility.
The retail and attire markets have gone via a number of shifts since then. After a yr of booming demand and spiraling operational and provide chain prices, customers have been pulling again on discretionary spending as they hedge in opposition to inflation on important items. A number of attire retailers have reported falling gross sales and earnings within the new atmosphere.
The shift in demand and gross sales broadly has uncovered or created new monetary weaknesses for some within the trade, with the dangers in attire, malls and specialty retail rising in latest months, based on information from S&P International Market Intelligence. The variety of corporations prone to chapter, as measured by information from CreditRiskMonitor, has elevated considerably from final yr.
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