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Rue21 Exits Bankruptcy — Here’s How The Retailer Is Doing

National Retail

Another retailer has emerged from bankruptcy.

Rue21 is the second retailer this year to resurface from the restructuring process — though the retailer did not emerge unscathed. The specialty apparel and accessories brand, which filed for Chapter 11 bankruptcy protection in May, was forced to close approximately 420 stores, Retail Dive reports. The chain will now operate 758 stores across 45 U.S. states. 


Payless ShoeSource was the first retailer this year to emerge from bankruptcy protection in August, after ridding itself of more than $435M in debt. The discount footwear retailer had closed about 700 stores across the U.S., but continues to operate its approximately 3,200 locations in more than 30 countries.

Like Payless, decreased sales, higher operating costs and a shift away from brick-and-mortar were all to blame for Rue21's struggles. The retailer had struggled with a debt load close to $1B because of a leveraged buyout by private equity firm Apax Partners in 2013.

According to Retail Dive, Rue21 acknowledged it failed to focus on a more refined merchandising and e-commerce fulfillment strategy that would attract and retain modern consumers, further exacerbating the chain's problems.

"Rue21 can now move forward from a position of renewed strength, with a highly relevant brand, an enthusiastic and loyal customer base, hundreds of highly performing stores, and a rapidly growing e-commerce business supported by strong vendor relationships and terms that are trending well above plan," Rue21 CEO Melanie Cox said in a release.