Popular mall retailer closing all stores across the US after filing for bankruptcy
Another US retailer is closing its doors after filing for Chapter 11 bankruptcy.
Rue21, which mostly sells teen apparel, will close all of its 540 stores across the United States, according to the court filings submitted last Thursday, Reuters reported.
The fashion chain has filed for bankruptcy twice before and had tried to find a buyer before shutting down. The company currently has $194.4m debt.
On Monday morning, Rue21’s website was displaying the message: “Our site is being updated. Check back soon.”
The company plans to close its stores over the next few months while running “going out of business” sales and attempting to sell its intellectual property.
The Warrendale, Pennsylvania-based retailer previously filed for bankruptcy in 2003 and 2017, according to Reuters. Following the last bankruptcy, around 400 stores were closed.
Around 4,900 employees will be affected by the closures. The pandemic and a shift to online retail badly affected the brand, Retail Dive reports. The company made an attempt in 2022 to raise more capital.
Lenders now own 85 per cent of Rue21’s stock, court filings show.
The retailer’s demise comes after a wave of store closures by other brands across the US this year. Around 1,290 stores had already closed in 2024 or were set to in the coming months.
Express, Macy’s, Walmart and Dollar Tree have all announced that they will close stores as foot traffic has dropped.
Malls and shopping centres in the US and elsewhere have struggled this decade due to rapidly-changing consumer habits, and the rise of online shopping.
In late 2023, it was estimated that 25 per cent of malls across the United States will close by 2025.
