May 22, 2024

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The popular mall retailer is closing all stores nationwide

The popular mall retailer is closing all stores nationwide

Joshua Hallenbeck and Mark Sternfeld

2 hours ago

Irvine Spectrum Shopping Center (Getty Images)

Rue21, the teen clothing company, filed for Chapter 11 bankruptcy on Thursday and announced plans to close all of its stores across the country, including 19 in California.

According to the filing, the Warrendale, Pennsylvania-based retailer plans to conduct large-scale “going out of business” sales. All 543 U.S. stores are expected to close within the next two months, according to court documents.

Besides closing all of its physical stores, Rue21 plans to divest all of its intellectual property and intangible assets.

21st Street
A shopper walks past a closed store on 21st Street in the reopened Anderson Mall in Anderson, South Carolina, on Friday, April 24, 2020. (Photographer: Dustin Chambers/Bloomberg via Getty Images)

Contributing factors were more than $194 million in outstanding loans, the company said, citing negative impacts from the COVID-19 pandemic and the shift in shopping patterns from brick-and-mortar to online. In addition, operating losses have accumulated due to poor performance of retail locations, increased industry competition and higher inflation.

While the company continues to generate revenues, they are insufficient to meet its liquidity and working capital requirements in the long term.

Rue21 is the successor to Pennsylvania Fashions Inc., which, after filing for Chapter 11 in 2003, changed its name to Rue21. They quickly became a household name, gaining huge popularity during the late 2000s and early 2000s.

The company had more than 1,000 stores in 2014. In 2017, Rue21 filed for Chapter 11 after facing issues with its reliance on physical in-store shopping, which led to the closure of 400 stores nationwide.

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In California, Rue21 has locations in Anderson, Apple Valley, Carson, Chico, Delano, Fairfield, Folsom, Hemet, Hesperia, Lake Elsinore, Madera, Moreno Valley, Palmdale, Salinas, Santa Maria, Selma, Tulare, Turlock, and Vacaville.