Popular bankrupt mall retailer closes all stores in one state – CEO blames ‘online shopping surge’

A prominent mall retailer that filed for bankruptcy earlier this month is closing all of its stores in one state.

The brand cited e-commerce issues amid rolling store closures sweeping the country.

A well-known mall retailer is closing for good


A well-known mall retailer is closing for goodSource: Getty
Shoppers at Rue21 will have to go elsewhere to satisfy their style and fashion needs


Shoppers at Rue21 will have to go elsewhere to satisfy their style and fashion needsSource: Getty
Earlier this month, the brand announced bankruptcy


Earlier this month, the brand announced bankruptcySource: Getty

This is the third time since 2003 that lifestyle and clothing chain Rue21 has filed for bankruptcy.

On May 2, Rue21 filed a Chapter 11 petition that provided further details about its financial problems.

The brand has approximately $200 million in debt and employs approximately 4,900 employees.

Interim CEO Michele Pascoe explained in his filing that the company has faced challenges over the past few years triggered by the coronavirus pandemic.

Read more about store closures

The shopping landscape has changed, and Pascoe says most Rue21 customers have opted to shop online instead.

She described the brand’s core demographic as “teens and young adults” with an approximate average household income of around $50,000.

The CEO said the company’s “core customers are primarily focused on making purchases at an affordable price.”

This concentration has apparently been threatened by “rising economic growth and online shopping.”

In his filing, Pascoe attributed the company’s decline to “unfavorable market trends, including the shift from traditional retailers to online retailers and changing consumer preferences.”

Liquidation sales have begun at Rue21 locations nationwide and will reportedly continue for the next six weeks.

Locker room: bankruptcy and strategic moves of Express Inc

Sales have already begun in Washington, D.C., where all Rue21 stores will close for good – starting at South Hill Mall in Puyallup, about 10 miles southeast of Tacoma.


Joe Bell, a spokesman for the mall, confirmed that the company was already considering leasing the space left at Rue21 to another retailer.

He called Rue21’s situation “unfortunate,” telling The News Tribune that the mall had seen the brand struggle for several years.

“It’s unfortunate, but the company has had a difficult time over the last few years,” Bell said.

“Our leasing directors have already made contact with other business owners who might be interested in opening a store in the mall.”

How does bankruptcy work?

Bankruptcy is a specific legal process that helps companies eliminate debts they cannot repay.

This process allows businesses to start over and gain access to new credit.

Bankruptcies overseen by federal courts allow a company to more easily sell its assets to pay creditors, according to Investopedia.

Chapter 11, a process common in companies, is used to restructure a company to remain open – even if that means selling most of the company’s real estate.

Chapter 7, on the other hand, sells all of the company’s assets, putting it out of business.

Along with Washington, Rue21 is expected to soon close all of its locations in every state where it operates.

The exact dates of each closure remain unclear.

According to its website, Rue21 has approximately 541 stores in 45 states.

For more on this topic, see The US Sun’s coverage of 11 key stores closing for good following the bankruptcy announcement of clothing retailer Express.

The US Sun also recounts the story of a large retailer closing its store and “keeping nothing” during a 30% off liquidation sale.