Rue21 – the teen fashion chain that is a fixture in malls across America – is to shut all 543 US stores.
Customers will be able to pick up deals while the company clears its stock over the next four to six weeks – but then the 40-year-old chain will be gone forever. At its peak, it had 1,200 shops.
It is expected clearance items will start at 20 to 50 percent off then rise up to as much as 90 percent to clear stock that doesn’t initially sell.
Bosses did try to sell the chain – but none of the bids would raise as much money as closing down and selling off all the stock, court documents say.
Rue21 spans strip malls, shopping malls and outlet centers across 45 states. Texas has the most with 51 stores, followed by Georgia’s 39, while Florida and North Carolina each have 30.
This weekend, Rue21’s website said it was ‘being updated’. It is thought it is being set up for the closing down sale, which will run online and in shops. The 4,900 employees will stay on while stock is cleared.
Rue21 has filed for Chapter 11 bankruptcy and will close all 543 stores within four to six weeks
Rue21 is closing all 543 stores and will clear its stock over the next four to six weeks in clearance sales
Rue21 will start a sale to clear all its stock. Around 5,000 staff work at the retailer
Rue21, headquartered in Warrendale, Pennsylvania, has filed for bankruptcy twice before.
After the first one in 2003 it flourished and under the ethos ‘fashion should be fun and accessible to all’ it grew to have more than 1,200 stores at its peak in 2013.
But it hit financial problems again and in 2017 it used bankruptcy to restructure – shutting 400 underperforming stores and negotiating leases.
The latest Chapter 11 bankruptcy will see see all stores shut. Court documents say it will have ‘going out of business sales’ for the next four to six weeks across all stores. It has around $200 million in debt.
Rue21 is also selling its brand name and other intellectual property. This means it could be bought by a rival who might re-open it as a smaller chain or bring it back as online.
Interim CEO Michele Pascoe said said in a court filing that the retailer was badly hit hard by a shift to online shopping that was accelerated by Covid.
hit hard by a shift to online shopping that was accelerated by the COVID-19 pandemic.
Neil Saunders of GlobalData
Retail expert Neil Saunders blamed the ‘growing irrelevance of the brand to teen consumers.’
‘Rue21 does not have a very compelling proposition and is losing customers to other retailers and to cheaper and more interesting fashion platforms like Shein,’ Saunders, managing director of GlobalData, told CNN.
‘There is still a big question mark over whether the retail market needs Rue21 to exist.’
Rue21 is the latest to file for bankruptcy and store closures.
In April, Express – another mall staple – filed for bankruptcy and said it would shut 95 Express outlets alongside all of its UpWest stores.
Rue21’s website was down over the weekend
The West Coast brand – which has shops in California, Texas, Arizona and Nevada – announced last week that all 371 stores would shutter though it did not give a timeline for the closures. Pictured: the first 99 Cents store ever opened at La Tijera Boulevard
The same month, discount chain 99 Cents Only Stores said it was closing all 371 stores as it went out of business.
Die-hard shoppers of 99 Cents Only have been flocking to stores in California and stripping shelves bare to snap up bargains.
Meanwhile, in the third bankruptcy of April, national coffee and upmarket grocery chain Foxtrot also said it will shut all its stores with immediate effect – leaving staff and customers stunned
Foxtrot, which was established in 2014 in Chicago, had 33 locations across the Chicago, Austin, Dallas and Washington DC areas.
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