S&P affirms rue21

S&P said it affirmed its ratings, including the B- corporate credit rating, on rue21 Inc. The outlook remains negative.

“We now view the company’s competitive position less favorably, reflecting performance in the increasingly competitive retail apparel market and our expectation that EBITDA margins will remain below 16% for the next few years.

“Our view of rue21's business risk assessment considers the company’s smaller operating scale in the highly competitive and widely fragmented specialty apparel retail sector,” said S&P credit analyst Mathew Christy in a news release. “Although we believe the company benefits from its primarily off-mall-based store fleet, as mall traffic has generally declined, we also believe the company is not immune to the weakness in the retail apparel industry.”

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