Another addition to the list of fashion retailers filing for bankruptcy is US-based teen fashion brand Rue21 Inc. The company filed for Chapter 11 in the US Bankruptcy Court in Western District of Pennsylvania, USA.
The retailer was not able to withstand changing shopping habits, online shopping, as well as dealing with evolving consumer tastes, due to which it ultimately has decided to close stores. Last month, it announced 400 stores closures.
The company said in a statement that it “may evaluate additional store closings as it continues to manage its real estate lease portfolio. The restructuring is an important step forward in Rue21’s ongoing business transformation into a more focused and highly performing retailer”.
Also Read – Rue21 prepares to file for Bankruptcy
It may be noted that during the past two years, retailers such as The Wet Seal, Aeropostale, Quiksilver, Pacific Sunwear and American Apparel, reflected similar challenges and succumbed to shifts in teen spending habits.
“Even in a challenging environment, we are fortunate that Rue21 has highly relevant brands, an enthusiastic and loyal customer base, and hundreds of highly performing stores. The agreement with our lenders represents their confidence in Rue21’s future success even at a time of significant retail industry change,” said Melanie Cox, CEO, Rue21.
