Rue21, a popular teen apparel store found in malls, is shutting down all 540 of its stores in the coming weeks after filing for bankruptcy for the third time in its history. The Pittsburgh-based company, which had 1,200 locations at its peak, has been in business for nearly 50 years but has been struggling financially in recent years despite a previous bankruptcy in 2017.
Interim CEO Michele Pascoe cited challenges from the Covid-19 pandemic, changing consumer shopping patterns, and competition from online retailers as reasons for Rue21’s bankruptcy. The company has $200 million in debt and employs 4,900 people, but its declining relevance to teen consumers and lack of a compelling retail proposition have contributed to its downfall, according to experts.
Despite these challenges, some retailers like Joann have been able to emerge from bankruptcy and strengthen their financial foundation. With stores in 45 US states set to close within the next 4 to 6 weeks, Rue21 is the latest retailer to face financial difficulties. Other companies like Express and 99 Cents Only Stores have also declared bankruptcy and announced store closures.
