Sometimes, a retail chain ends abruptly. That's not usually the case. Most retailers sputter to their death.
Customers see limited selection. Restocking takes longer. Random sales pop up. Bed Bath & Beyond and Christmas Tree Shops are examples. They experienced public financial troubles.
Vendor payments fall behind first. This sets off a slow, painful death. Vendors lose trust. They ask for cash upfront. They stop shipping merchandise.
Empty shelves spell disaster. This often leads to Chapter 11 bankruptcy. It's a long process involving banks, vendors, and courts.
Survival is possible. Vendors want to get paid. They don't want a big customer to disappear. Another player might not replace the sales volume.
David's Bridal and Party City survived Chapter 11. They found financial partners. Rue21, however, will not survive its third filing.
During the Covid pandemic, Rue21 expanded. Other retailers were shrinking. Former CEO Bill Brand was hopeful.
“Over the next three weeks we’ll open five stores before students head back to classrooms, and a total of 15 by the end of the year,” Brand said in 2021. “Next year, we’re going to open at least 20, and about half of those are already committed."
It was a hopeful time. Rue21 had closed about 400 locations before. Michele Pascoe, then-CFO, added to the optimism.
“Rue21’s marriage of data and customer recognition provides the perfect formula for a winning location,” Pascoe said. “The success of the new stores in 2020 fueled investment in the 15 new stores this year.”
That success was short-lived. Financial problems returned quickly. Rue21's Chapter 11 filing was not unexpected. But closing all stores was surprising.
Usually, Chapter 11 offers a chance to reorganize. Rue21, however, is liquidating its 540 stores. They will soon close permanently. Final closing dates depend on inventory.
