Rue21 – the teen fashion chain found in malls across America – will close its 543 stores in the United States.
Customers will be able to score deals while the company clears inventory 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 stores.
Clearance items are expected to start at a 20 to 50 percent discount, then increase up to 90 percent to clear inventory that doesn’t initially sell.
The bosses tried to sell the chain, but none of the offers would have raised as much money as closing and selling all the inventory, according to court documents.
Rue21 covers malls, malls, and retail centers in 45 states. Texas has the most with 51 stores, followed by Georgia with 39 stores, while Florida and North Carolina each have 30.
This weekend, Rue21’s website said it was “being updated.” It is believed to be being prepared for the closing sale, which will take place online and in stores. The 4,900 employees will remain on the job until stocks run out.
Rue21 has filed for Chapter 11 bankruptcy and will close its 543 stores within four to six weeks
Rue21 is closing its 543 stores and will sell off its stock in the next four to six weeks.
Rue21 will launch a sale to sell off all its stock. Around 5,000 employees work at the retailer
Rue21, headquartered in Warrendale, Pennsylvania, has already filed for bankruptcy twice.
After the first in 2003, the brand flourished and, following the philosophy “fashion should be fun and accessible to everyone”, it grew to over 1,200 stores at its peak in 2013.
But the company ran into financial problems again and resorted to bankruptcy in 2017 to restructure, closing 400 underperforming stores and negotiating leases.
The latest Chapter 11 bankruptcy will result in the closure of all stores. Court documents indicate there will be “going out of business sales” over the next four to six weeks at all stores. Its debt is around $200 million.
Rue21 also sells its brand and other intellectual property. That means it could be bought by a rival who could reopen it as a smaller chain or bring it back online.
Michele Pascoe, interim CEO, said in a court filing that the retailer had been hit hard by the shift to online shopping accelerated by Covid.
hit hard by the shift to online shopping accelerated by the COVID-19 pandemic.
Neil Saunders of GlobalData
Retail expert Neil Saunders blamed the brand’s “increasing irrelevance in the eyes of teenage consumers”.
“Rue21 doesn’t have a very compelling proposition and is losing customers to other retailers and cheaper, more interesting fashion platforms like Shein,” Saunders, chief executive 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 close stores.
In April, Express – another mall staple – filed for bankruptcy and announced it would close 95 Express outlets as well as all of its UpWest stores.
The Rue21 site was down this weekend
The West Coast brand – which has stores in California, Texas, Arizona and Nevada – announced last week that all 371 stores would close, although it did not provide a timeline for the closures. Pictured: The first 99 Cents store ever opened on La Tijera Boulevard
The same month, the discount chain 99 Cents Only Stores announced the closure of its 371 stores due to its cessation of activity.
Die-hard 99 Cents Only shoppers flocked to California stores and bared the shelves for bargains.
Meanwhile, in April’s third bankruptcy, national high-end coffee and grocery chain Foxtrot also announced it would close all its stores with immediate effect – leaving staff and customers stunned.
Foxtrot, founded in 2014 in Chicago, had 33 locations in the Chicago, Austin, Dallas and Washington DC areas.
dailymail us
