(Photo : Pexels/GeorgeShervashidze)
A major clothing retailer has declared bankruptcy, leading to the decision to shut down all 540 stores across the country within the next six weeks.
As the company moves to close out its operations, liquidation sales will begin at all rue21 locations nationwide, with significant discounts offered to clear out the remaining inventory.
Retailer rue21, Teen Fashion Chain Closing 543 Stores
Reuters has learned that rue21, a fashion retailer, has declared Chapter 11 bankruptcy and is set to close more than 500 stores. The company plans to shut down 543 locations across the United States within two months and hold extensive "going out of business" sales.
These details emerged from court documents filed with the U.S. Bankruptcy Court in Delaware. Alongside closing its physical stores, rue21 is looking to sell its intellectual property rights as part of its liquidation process.
As of Friday morning, rue21 has not officially released a statement nor responded to requests for comments on the bankruptcy. The retailer's website is currently offline, signaling ongoing disruptions.
According to USA Today, rue21, a retailer headquartered in Warrendale, Pennsylvania, sought bankruptcy protection again. This is the third instance, following previous filings in 2003 and 2017. During the 2017 bankruptcy, the company closed 400 stores and reduced its debt by approximately $700 million.
Presently, rue21 employs about 4,900 workers and is burdened with $194.4 million in debt. Initially founded in 1970 as Pennsylvania Fashions Inc., the company underwent several brand changes until its bankruptcy in 2002.
Also Read: Market Hall Foods Announces Closure After 28 Years, Citing Economic Challenges
It reemerged in 2003 under the new name rue21.
As reported by Reuters, efforts to sell the business have been unsuccessful, with potential buyers unwilling to offer more than what the company might fetch through liquidating its stock and closing down its stores.
To assist in managing the store closures, rue21 has enlisted the services of financial consultancy firm Gordon Brothers.
Retailer Bankruptcy Tied to Online Shopping Rise
(Photo : PexelsRonLach)
The U.S. Sun has reported significant challenges faced by a prominent teen fashion retailer, which has declared bankruptcy. Company executives have attributed the financial downfall to the increasing dominance of online shopping and evolving consumer preferences.
Michele Pascoe, the interim CEO, highlighted additional pressures from fierce competition and rising inflation as contributing factors to their financial struggles. This is not the first time the company has faced such difficulties, having previously filed for bankruptcy in 2002.
At its height, the retailer operated over 1,000 stores nationwide but now maintains several dozen outlets in states including Florida, Georgia, Illinois, North Carolina, Pennsylvania, and Texas.
The ongoing trend of retail bankruptcies has seen this chain, among others, unable to stay afloat in a changing economic landscape.
To mitigate losses, the company has initiated discount sales at locations like the Paramus Park Mall in New Jersey and Northlake Mall in Charlotte, North Carolina, where merchandise prices have been slashed by at least 30%.
However, the urgency for a resolution is palpable, with company officials warning that a swift sale is imperative to prevent total liquidation. "We are going to try to get this done right, and we are going to move very quickly because we only get one shot," stated Emily Geier, a company legal representative, during a Delaware court hearing.
Other retailers, including Pirch and the discount chain 99 Cents Only, have also succumbed to bankruptcy this April, underscoring a broader trend of financial distress within the retail sector.
Related Article: US Bank Announces Permanent Closure of Century-Old Branch Amid Widespread Competitor Shutdowns
