A PROMINENT mall retailer that filed for bankruptcy earlier this month is closing all of its stores in a single state.
The brand highlighted e-commerce for its industry struggles as store closures continue to sweep the country.
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It is the third time since fashion and style chain Rue21 filed for bankruptcy since 2003.
Rue21 submitted its Chapter 11 judicial filing on May 2, which provided more details about his financial difficulties.
The brand has debts of around US$200 million and has around 4,900 employees.
Interim CEO Michele Pascoe explained in the process that the company has encountered challenges in recent years started by the coronavirus pandemic.
Read more about store closures
The shopping landscape has changed and, according to Pascoe, Rue21 has found much of its customer base opting for online shopping.
She described the brand’s core demographic as “teens and young adults” with an approximate median household income of about $50,000.
The CEO said its “core customers are focused on affordable shopping” more than anything.
That focus was apparently threatened by a “surge in online shopping.”
Pascoe attributed the company’s decline in the process to “adverse market trends, including a shift from traditional retailers to online retailers and changing consumer preferences.”
Clearance sales have begun at Rue21 locations nationwide and will continue for the next six weeks.
Those sales have already started rolling out in Washington, which will see all of its Rue21 stores closed for good — starting with the South Hill Mall in Puyallup, about 10 miles southeast of Tacoma.
SAYING GOODBYE
Joe Bell, a spokesman for the mall, confirmed that they already intend to lease the space vacated by Rue21 to another retailer.
He called Rue21’s situation “unfortunate,” saying the mall has seen the brand struggle for several years as he spoke to The News Tribune.
“It’s unfortunate, but this company has fallen on hard times in recent years,” Bell said.
“Our leasing executives are already interacting with other business owners who may be eager to open a store in the mall.”
How does bankruptcy work?
Bankruptcy is a specific legal process that helps businesses eliminate debts they cannot pay.
The process allows businesses to start from scratch and gain access to new credit.
Overseen by federal courts, bankruptcies allow a company to more easily sell its assets to pay creditors, according to Investopedia.
Chapter 11, a common process for businesses, is used to restructure a business with the goal of staying open — even if it means selling most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Along with Washington, Rue21 is prepared to soon close all of its locations in every state where it operates.
The exact dates of each closure remain unclear.
Rue21 has about 541 stores in 45 states, according to its website.
For more related content, check out The US Sun’s coverage of the top 11 stores that closed for good following clothing retailer Express’ bankruptcy announcement.
The US Sun also tells the story of the major retailer closing a store and “holding nothing back” during 30% off clearance sales.
This story originally appeared on The-sun.com read the full story
