NEW YORK, May 2 (Reuters) - Teen apparel retailer rue21

filed for Chapter 11 bankruptcy protection for a third

time on Thursday, seeking to shut down its 540 stores and sell

its intellectual property.

rue21 has attempted to sell its business, but no buyer

appeared willing to pay more than the company would earn by

liquidating its inventory in "going out of business" sales and

shutting down its stores, the company said in documents filed in

Wilmington, Delaware, bankruptcy court.

The Warrendale, Pennsylvania-based retailer, which

previously filed for bankruptcy in 2003 and 2017, focuses on

affordable fashion for teens and young adults. rue21 has

approximately 4,900 employees and $194.4 million in debt.

At its peak, it had 1,000 stores in malls throughout the

U.S. The company closed about 400 stores during its 2017

bankruptcy, in a deal that allowed rue21 to slash $700 million

in debt.

But the company continued to struggle after emerging from

bankruptcy, hit hard by a shift to online shopping that was

accelerated by the COVID-19 pandemic.

rue21 sought to raise more capital to address those business

challenges in 2022, ultimately getting a $25 million investment

from its existing lenders. Those lenders now own 80% of rue21's

stock, according to court filings.

rue21 intends to sell its brand and other intellectual

property separately from its store closing sales. The company

has hired Gordon Brothers to assist with the store closing

sales.