New York
CNN
—
Rue21, a mall staple for teen attire, goes out of enterprise and shutting all 540 of its shops throughout the coming weeks.
The Pittsburgh-based firm filed for chapter Thursday for the third time in its existence, signaling the tip of practically 50 years in enterprise for the retailer, which had 1,200 areas at its peak just some years in the past.
The retailer, which has about $200 million in debt and 4,900 staff, has been struggling financially in recent times regardless of a 2017 chapter that the corporate hoped would flip Rue21 round. It additionally filed for chapter in 2003.
In a court docket submitting, interim CEO Michele Pascoe stated that Rue21 was “negatively impacted by challenges stemming from the Covid-19 pandemic and associated opposed market traits, together with a shift in client procuring patterns from conventional brick-and-mortar retailers to on-line retailers and altering client preferences.”
Pascoe stated that Rue21’s chapter was brought on by “under-performing retail areas, elevated trade competitors and the uptick in on-line procuring, inflation and macroeconomic headwinds, and challenges elevating capital.”
A significant drawback that led to Rue21’s downfall was its “rising irrelevance of the model to teen customers,” in response to Neil Saunders, managing director and retail analyst at GlobalData Retail.
“Rue21 doesn’t have a really compelling proposition and is dropping clients to different retailers and to cheaper and more interesting fashion platforms like Shein,” he advised CNN. “There’s nonetheless an enormous query mark over whether or not the retail market wants Rue21 to exist.”
Rue21 didn’t instantly reply to CNN’s request for remark, and its web site not works.
Its shops, that are situated in 45 US states, will shut throughout the subsequent 4 to six weeks and “going out of enterprise” gross sales are starting quickly. The corporate can even promote its model title and different mental property.
Rue21 is the most recent retailer to hit monetary turbulence. Express filed for bankruptcy final month and introduced it was closing about 100 shops. 99 Cents Only Stores, a reduction chain, additionally stated in April it was going out of enterprise.
Joann, the materials retailer, went bankrupt in March and exited from the method this week, proclaiming that it’s in its “strongest monetary basis in a few years.”