Another popular mall retailer files for Chapter 11 bankruptcy
It was not too long ago that shopping malls were a popular destination for commerce, birthday parties, dining, and even a spot for people who wanted to get a couple of laps in for cardio.
Nowadays, though, if you visit your local shopping mall (which, chances are, it’s not even that local) it looks more like a scene from a post apocalyptic movie than a place you’d want to spend a few hours at during your weekend.
Many malls have shuttered due to a decline in foot traffic, and though the common belief is that they’re closing due to Covid or Amazon (AMZN) , the reality is that people just don’t like congregating the way they used to.
Consumers are far more interested in a cheaper shopping experience, which can often be found at off-mall retailers like TJ Maxx (TJX) , outlet malls, and yes, even online.
Once high flying retailers that teens and adults grappled for on a busy Saturday afternoon, like Express, Forever 21, Macy’s, and Gap are now relics of the past. Many have shuttered hundreds of stores, filed for bankruptcy, or sought rebrands and new ownership.
More Retail:
A woman passes a vacant storefront at the Westminster Mall in California. MediaNews Group/Orange County Register via Getty Images/Getty Images
Popular mall retailer files for Chapter 11
And some unlucky retailers with close ties to the mall have been forced to file for bankruptcy multiple times.
Such is the case with Rue 21, a store primarily marketed at teen and tweens seeking trendy but affordable clothing. Rue 21 sells everything from party dresses to graphic tees, but has struggled to regain the enthusiasm it enjoyed during the early 2000s when choices were more limited and trendy fast fashion shops weren’t a dime a dozen. Or shop-able on TikTok.
And so on May 2, Rue 21, a majority of which is owned by Blue Torch Capital, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware. It listed $100 million-$500 million in assets and liabilities in its petition. Blue Torch Capital owns approximately 78% of the troubled retailer.
Rue 21 will attempt to sell itself, though it’s not clear whether it has any interested parties at this time.
This marks the third time Rue 21 has filed for bankruptcy. In 2002, it filed for Chapter 11 under its prior label, Pennsylvania Fashions. It reorganized and attempted to expand, exiting Chapter 11 in 2003 and renaming itself Rue 21.
Then in 2017, Rue 21 announced it would close 400 stores and file once again for Chapter 11. It re-emerged in September 2017 and announced in 2020 that it would pivot more of its focus to plus sized and size inclusive offerings.
Rue 21 has not officially commented on the most recent filing. As of this writing, its website was down, with a black message reading, “Our site is being updated, please check back soon.”