Rue21’s store at Chesterfield Towne Center is among hundreds that will shutter nationally. (Jack Jacobs photo)
The bankruptcy filing of a national chain of teen clothing stores will have ripple effects in the Richmond-area retail scene.
Pennsylvania-based Rue21 plans to close its more than 540 locations throughout the country as it seeks Chapter 11 bankruptcy protection.
Among those are three stores in the Richmond area. In Henrico, the company has a 4,000-square-foot store at 4501 S. Laburnum Ave. in the White Oak shopping center. Its Midlothian outpost is a 7,000-square-foot store near the Crunch Fitness in the Chesterfield Towne Center mall. In Colonial Heights, Rue21 has a store close to the Regal movie theater within Southpark Mall.
Those stores remained open as of Tuesday afternoon following the company’s bankruptcy filing last week, in which Rue21 anticipated it would complete store-closing sales in four to six weeks.
Rue21 didn’t respond to a request for comment.
Filing for Chapter 11 bankruptcy will allow the company to hash out a plan to pay its debts while it continues to operate in the interim.
In court filings, Rue21 interim CEO Michele Pascoe said the retailer “recently experienced operational losses resulting from, among other things, underperforming retail locations, increased industry competition and the uptick in online shopping, inflation and macroeconomic headwinds, and challenges raising capital.”
Rue21 sought out potential buyers prior to its bankruptcy filing, but the company said the offers fell short of the amount of money the retailer anticipates it can generate from liquidating its store inventory and closing down all its brick-and-mortar locations.
In addition to winding down its retail footprint, the bankruptcy process will include the potential sale assets including intellectual property and leasehold interests.
Rue21 estimated its assets at between $100 million and $500 million and pegged its liabilities in the same range, according to court filings. The company’s Chapter 11 filing made last week was its second time ducking into bankruptcy protection since 2017.
Rue21 isn’t the only national retailer to indicate plans to exit the local market in recent weeks. Musical instrument seller Sam Ash Music announced it would shutter all its stores, including its sole Richmond-area outpost in western Henrico.
Just a side note if you are closing all retail stores, clearing out your inventory and put a going OUT of business of your website how is this a Chapter 11 re-organization plan??? How is this not a chapter 7 plan. Oh well I guess the lenders will file their reply soon.
Anyone going to miss this one? My daughter always thought the fashions at Rue Vingt-et-un were generally like parodies of various styles — look, here’s some patched together pants that look like someone has vandalized with spray paint, etc…
We tended to be some of the only ones in there because we are curious novelty seeking types, but we were never there to buy anything.