Another national retailer is calling it quits after the pressures of a changing retail environment, disastrous COVID-19 policies and Bidenomics caused the chain to make some hard choices.
Rue21, which was once a mainstay in malls all across the country, will close all 540 of its stores in the coming weeks, according to CNN.
The Warrendale, Pennsylvania-based clothing chain filed for bankruptcy on Thursday. It plans to begin offering steep discounts on its remaining inventory, but after that is all gone, the 40-year-old chain will be shut down forever.
Deals will be set at 20 percent to 50 percent of retail prices and likely will rise to 90 percent until everything is gone, the U.K.’s Daily Mail reported.
Owners of the retailer tried to find a buyer to keep the doors open but found no takers, according to court filings.
Rue21 has outlets in 45 states, according to WNEP-TV. Texas is its largest market with 51 stores, followed by Georgia with 39.
Despite the financial problems hanging over it, the chain said its 4,900 employees will stay on during the final clearance sales, according to CNN.
Founded in 1970 as Pennsylvania Fashions Inc. in Philadelphia, the company soon became a popular chain for young shoppers in malls everywhere. Selling clothing under the slogan, “Fashion should be fun and accessible to all,” Rue21 grew to more than 1,200 stores at its height in 2013.
The road has been rocky recently, however, and the company filed for Chapter 11 in 2017. The company shuttered 400 underperforming stores but was able to keep moving forward.
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But now the pressures have been too much.
Interim CEO Michele Pascoe said in a court filing that Rue21 was “negatively impacted by challenges stemming from the COVID-19 pandemic.”
After millions of shoppers got used to buying online during the lockdowns, the retailer found it hard to get customers back in the malls.
Analyst Neil Saunders of GlobalData told CNN that the chain is no longer appealing to today’s customers.
“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 said.
shop graphics, shorts & more now BOGO 50% OFF! 🚨https://t.co/DLC4OLoB1y #rue21 #deals #bogo50 pic.twitter.com/e0M1LXzQCS
— rue21 (@rue21) June 2, 2023
The clothing retailer is far from the only brick-and-mortar business facing difficulty.
Mid-priced seafood restaurant Red Lobster said last month that labor costs and food prices were driving it to a possible bankruptcy filing. The chain said it lost $22 million in 2023.
In August, pharmacy giant Rite Aid filed for bankruptcy after falling into billions of dollars in debt.
