Rue21, a popular teen apparel retailer, is set to close all 540 of its stores in the coming weeks as it filed for bankruptcy for the third time in its nearly 50-year history. The Pittsburgh-based company, which once had 1,200 locations, has been facing financial challenges despite a previous bankruptcy filing in 2017.
The interim CEO cited various factors for Rue21's bankruptcy, including the impact of the Covid-19 pandemic, changing consumer shopping habits favoring online retailers, and industry competition. The company struggled with underperforming stores, increased online shopping trends, inflation, and difficulties in raising capital.
Analysts pointed out that Rue21's downfall was also due to its declining relevance among teen consumers, who are turning to other retailers and more affordable fashion platforms like Shein. The company's stores, spread across 45 US states, will be closing in the next 4 to 6 weeks, with going-out-of-business sales starting soon.
Rue21's bankruptcy is part of a trend in the retail industry, with other companies like Express and 99 Cents Only Stores also facing financial challenges. Joann, a fabrics retailer, recently emerged from bankruptcy in a stronger financial position.
