Rue21 Set To Shut Down After Filing For Bankruptcy a Third Time
Since its inception, American fast fashion brand Rue21 has filed for bankruptcy three times, with the latest declaration filed this month.
While the specialty retailer was able to rebound from the two previous setbacks, the latest announcement is likely to be the final nail in the coffin for the company’s future. According to a Reuters report, Rue21 plans to shut down all 543 US stores in the next two months. The teen fashion retailer will hold “going out of business” sales on a massive scale, also disposing of its intellectual property rights. The court documents have been filed for the same in the US Bankruptcy Court in Delaware.
The brand first filed for bankruptcy back in 2002, which was followed by another Chapter 11 bankruptcy in 2017. During the 2017 filing, the retailer closed 400 stores and was able to cut around $700 million in debt. As per Reuters, the company is approximately $194.4 million in debt. According to the same report, the brand attempted to sell its business but didn’t receive a proposal that exceeded the sum the company would earn by liquidating its inventory.
Rue21 is the third major retailer to shut down operations this year, joining 99 Cents Only stores and The Body Shop in closing all US-based stores. Crafts retailer Joann and mall-based clothing retailer Express have also filed bankruptcy in the last few months, but the two companies are still trying to survive. All these retailers have faced an uphill battle against online shopping websites, and the pandemic accelerated the process, ultimately resulting in mass closings.
Rue21 is headquartered in the Pittsburgh suburb of Warrendale, Pennsylvania, and was conceived in 1970. Their target market is the young diaspora, especially people who desire, wish, or feel to be 21 years old.
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