Rue21, a teen clothing store often found in malls around the U.S., filed for bankruptcy last week and announced the closing of over 540 stores, including 20 across Illinois, citing declining sales and revenue.
The Chapter 11 filing in Delaware on Thursday coincided with an announcement on Instagram that all stores were going out of business along with an “everything must go” sale. All stores will close in the next two months.
The brand has stores at several suburban locations including North Riverside Park Mall, Fox Valley Mall and Chicago Premium Outlets in Aurora, River Oaks Center in Calumet City, Hawthorne Works in Cicero, Chicago Ridge Mall, Lincolnwood Town Center, Joliet Mall, Waukegan Plaza, Gurnee Mills, Woodfield Mall in Schaumburg and Southlake Mall in Merrillville, Indiana.
The business filed for Chapter 11 bankruptcy protection after suffering operational losses stemming from “underperforming retail locations, the continued growth of online shopping and industry competition,” among other reasons, according to the bankruptcy filing. It listed between $100 million and $500 million in assets and liabilities.
The retailer also operates an online platform.
According to court documents, the brand tried to find a buyer but ultimately decided to liquidate its assets instead.
Interim CEO Michele Pascoe said in a statement as part of the court filing that the retailer, like many others, was “negatively impacted by challenges stemming from the COVID-19 pandemic and related adverse market trends.”
“While the Debtors continue to generate revenue, their revenue streams — even when combined with extensive cost cutting measures — are insufficient to meet their long-term liquidity needs and working capital requirements,” Pascoe’s statement said.
Nearly 5,000 people are employed by Rue21 around the country, with about 1,500 who are full time and some 3,500 who are part time.
Rue21, headquartered in Pennsylvania and founded in 1976, previously filed for Chapter 11 bankruptcy in 2017, according to court documents, and also came out of Chapter 11 proceedings in 2003. Both filings were under the name Pennsylvania Fashions.
Roughly 400 underperforming stores were also closed after the 2017 bankruptcy filing.
