Seven years into its most recent comeback, teen fashion retailer Rue21 has filed for its third bankruptcy, citing “the continued growth of online shopping, industry competition, inflation and macroeconomic headwinds.”
Over the past two decades the mall-based retailer has struggled to regain the popularity it enjoyed during its heyday in the late ’90s. The company first filed for bankruptcy in 2002, then again in 2017. All of Rue21’s 540 remaining stores will now be shuttered in the next four to six weeks as part of this third bankruptcy, as along with its ecommerce operations. The retailer’s website currently displays a message that it is being updated, with no further information provided.
In its Chapter 11 filing, Rue21 indicated that it was looking to sell its IP so that the retailer could continue on in some new form, as fellow bankrupt retailers like Toys ‘R’ Us and Bed Bath & Beyond have done in recent years.
After emerging from its 2017 bankruptcy, Rue21 made a concerted effort to adapt to today’s shoppers, with a new loyalty program and revamped executive team that included a new CEO and CIO, both of whom joined from GNC in 2023. But apparently none of that was enough to stave off the mounting threat of enhanced fashion offerings from multi-brand retailers like Target and Walmart, as well as the recent entry of digital-first affordable fashion platforms like Shein, which have proven incredibly popular among Rue21’s core teen demographic.
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