Rue 21, a popular clothing and accessories store with locations nationwide, has filed for Chapter 11 bankruptcy.
According to court documents filed in the U.S. Bankruptcy Court in the District of Delaware, the company has decided to close all of its 540 stores and start the process of conducting going-out-of-business sales.
Before declaring bankruptcy, the company attempted to sell its business but found no profitable buyers.
According to the court filings, Rue 21’s $194.4 million debt was the major factor leading to its bankruptcy.
Bidenomics at work!
Rue21 files for bankruptcy, will close all stores https://t.co/Lo8XUUFu8Q #FoxBusiness
— RWC (@dirich1955) May 4, 2024
The teen apparel mall chain announced it is going out of business and shutting down all 540 of its stores. https://t.co/q2db4PbLrn
— ABC Columbia (@abc_columbia) May 4, 2024
Here’s what Fox Business reported:
Troubled retailer Rue21 – once a mall staple – filed for Chapter 11 bankruptcy protection, and plans to shutter all its stores and sell all its intellectual property.
This marks the third time the company has filed for bankruptcy as it struggles to continue operating.
According to court documents filed in the U.S. Bankruptcy Court in the District of Delaware, the company plans to close its stores and implement “going out of business” sales.
The company has about 540 stores in the U.S., according to its website.
Reuters reported the company tried to sell its business, but it didn’t secure a buyer that was willing to pay more than what the company would earn by liquidating its inventory.
How bout them bidenomics eh ???
Rue21 files for bankruptcy, will close all stores https://t.co/ZNWSJNkFmd #FoxBusiness
— Red Voter (@Rickcb7) May 4, 2024
Per CNN:
Rue21, a mall staple for teen apparel, is going out of business and closing all 540 of its stores within the coming weeks.
The Pittsburgh-based company filed for bankruptcy Thursday for the third time in its existence, signaling the end of nearly 50 years in business for the retailer, which had 1,200 locations at its peak just a few years ago.
The retailer, which has about $200 million in debt and 4,900 employees, has been struggling financially in recent years despite a 2017 bankruptcy that the company hoped would turn Rue21 around. It also filed for bankruptcy in 2003.
In a court filing, interim CEO Michele Pascoe said that Rue21 was “negatively impacted by challenges stemming from the Covid-19 pandemic and related adverse market trends, including a shift in consumer shopping patterns from traditional brick-and-mortar retailers to online retailers and changing consumer preferences.”
Pascoe said that Rue21’s bankruptcy was caused by “under-performing retail locations, increased industry competition and the uptick in online shopping, inflation and macroeconomic headwinds, and challenges raising capital.”
A major problem that led to Rue21’s downfall was its “growing irrelevance of the brand to teen consumers,” according to Neil Saunders, managing director and retail analyst at GlobalData Retail.
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