S&P: rue21 view to negative

Standard & Poor’s said it revised the outlook on rue21 inc. to negative from stable.

The agency also said it affirmed all of its ratings, including the B- corporate credit rating, B- rating on the company’s term loan facility and CCC rating on the unsecured notes.

The 4 recovery rating on the term loan reflects an expectation for 30% to 50% expected default recovery. The 6 recovery rating on the unsecured notes reflects an expectation for negligible recovery in a default.

The negative outlook is due to an expectation for lower profitability and weakening credit metrics in 2016, S&P said.

The agency said it previously expected 2016 sales to increase at a high single-digit rate, but is now expected to grow in the low-single digits as a result of a reduced net new-store forecast and expectation for negative comparable sales in 2016.

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