Rue21, A Youth Clothing Retailer, Applied For Bankruptcy Reorganization.

Another day, another American retailer applied for bankruptcy.

According to the world clothing shoes and hats net, teenagers

Retailer

Inc. on Monday night in the bankruptcy court of Pennsylvania Western District Court filed for bankruptcy reorganization according to the eleventh chapter of bankruptcy law of the United States, increasing the number of bankrupt retailers in the country to 20 this year. According to S&P Global Market Intelligence, this figure has exceeded the total number of 18 in 2016.

Rue21 Inc. has 1179 stores in shopping malls, street shopping areas and outlets. It sells men, women's clothing, accessories and cosmetics. Last month, the group announced that it had started closing 400 stores immediately.

According to observation, at present, the

The e-commerce website is functioning normally.

Rue21 Inc. said in a document submitted on Monday that the group's assets and liabilities were between $10-100 and that it had reached a restructuring support agreement with a number of shareholders. It would get $125 million DIP from the existing lender and $50 million of new DIP loans from existing lenders.

The group said the financing would support the day-to-day operations during the restructuring period, so the business could start as usual, but it would assess the scale of further closes and try to pour energy into the best performing stores.

The chief executive, Melanie Cox, said in the announcement that the above measures are aimed at strengthening the balance sheet, achieving an efficient cost structure and concentrating resources on a more compact retail network.

The group is expected to break away from bankruptcy reorganization this autumn.

Apax Partners LLP privatized Rue21 Inc. in 2013 at $1 billion 100 million, when J.P. Morgan Chase & Co., J.P. Morgan chase, Bank of, J.P., Goldman Sachs, Merrill Lynch, and Goldman Sachs, Goldman Sachs, provided $780 million in loans for the paction, and it only paid 283 million dollars in cash.

Rue21 Inc., therefore, has assumed huge debts. It is reported that the liabilities before the bankruptcy have accumulated to nearly 1 billion US dollars. Under such a retail environment, the retailer is obviously unable to pay its debts.

Bankruptcy of US retailers since 2010

In the past two years, the US has already gone bankrupt, such as Wet Seal Inc., A ropostale Inc. and American Apparel LLC, and so on. Among them, Wet Seal and Inc. are two bankruptcies in the short term.

Among them, Payless ShoeSource Inc. is the same as Rue21 Inc., who is deeply troubled by the change of consumer shopping patterns, but also because of LBO (leveraged buyout) and debt burden. Similarly, the US luxury goods department group Neiman Marcus Group LTD LLC Niemann Marcus group and fashion retailer, such as Group and so on.

Payless ShoeSource Inc. hopes to cut nearly half of its debts through bankruptcy reorganization, while Neiman Marcus Group LTD LLC Niemann Marcus group is seeking sale. It may fall into the Hudson Bay Group, a Canadian retail group that owns luxury goods department Saks Fifth Avenue Sax Fifth Avenue.

Even if they can continue to operate, many retailers choose to take strategic actions in response to changes in market and performance.

Credit Suisse Group AG, released at the beginning of April, showed that as of then, US retailers had closed 2880 stores in 2017, exceeding the record set in 2008, and 1.5 times more than the 1153 in 2016, while the number of stores closed throughout the year is expected to exceed 8640, including the strategic adjustment of the sales network for over expansion and the bankruptcy of retailers.

What's more, analysts believe that the retailing industry still needs a lot of closes to reduce its high store operating costs and reflect the growth of its own online businesses and Amazon.com Inc. NASDAQ:AMZN (Amazon).

Wells Fargo & Co., a senior analyst at Wells Fargo Bank Ike Boruchow, believes that 14 retailers, including Gap Inc. Inc. (NYSE:GPS), GAPP, L Brands Inc. (Brands), Vitoria, Co., and Co., should be closed.

Although these retailers do not have a high risk of bankruptcy, the clothing category they belong to is classified by S&P as the most risky category with department stores and electrical retailing.

The prospect of Nine West Holdings Inc., Claire 's Stores Inc. and Gymboree Corp. golden baby retailers continues to operate has been questioned by the market.

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