rue21 reports declining sales as financing assembled for $1.1 billion sale

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Cranberry teen clothing retailer rue21 continues to report declining sales results, news unlikely to reassure those raising financing for the planned $1.1 billion sale of the company to a private equity investor.

In a regulatory filing this morning, rue21 reported sales in the third quarter through Sept. 24 at stores open at least a year, a measurement known as comparable store sales, are down 9.5 percent.

In fiscal September, which began Sept. 1 and will end Oct. 5, comparable store sales were down 12.8 percent.

Total sales for the quarter are up 2.3 percent so far over the same period last year, but down 1.3 percent for fiscal September, the company said.

Rue21 said it was releasing the data because it "may be provided to prospective lenders in connection with the financing of the transactions contemplated by the previously announced merger agreement."

The company noted the data is preliminary and subject to revision.

Shareholders last week agreed to accept an offer of $42 per share and officials said they expected the deal to close in early October.

Weak sales reports from a number of teen clothing chains, in addition to rue21's own sluggish results in recent months, have raised concern about the sector.

The Wall Street Journal is reporting that efforts to sell debt associated with the rue21 sale are continuing, with investors being offered a discounted price.

breaking - businessnews - neigh_north

Teresa F. Lindeman: tlindeman@post-gazette.com or 412-263-2018.


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