It’s official — clothing and accessory retailer rue21 is officially going out of business after filing for bankruptcy for the third time. The store was a mainstay of teen fashion in the 2000s and 2010s, allowing young shoppers to save money on essentials for their wardrobes and growing a devoted fan base.
Those following the company’s trajectory will likely not be shocked, but previous shoppers may be curious about the fashion retailer’s fall from grace — a slippery slope that began in 2003.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!1
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Apply for a Discover Cashback Checking account today
Pennsylvania Fashions Inc.
The chain was founded in 1970, originally called Pennsylvania Fashions Inc. Today, the company is synonymous with young, preppy fashions.
The company’s demographic is largely 11 to 17-year-olds, as well as adults wanting to incorporate younger styles into their wardrobe. This branding was reflected in its 2003 name change to rue21.
Family business
Nineteen years after opening, the company was purchased by Cary Klein, the founder’s son.
Klein reportedly sold the business in 2001 to join the Big Burrito Restaurant Group, later assuming the role of CEO.
The first bankruptcy and rebranding
The first time rue21 filed for bankruptcy was in 2002. At the time, it was still called Pennsylvania Fashions Inc.
At the time of the filing, the store operated over 247 stores. They exited bankruptcy a year later, in 2003, and rebranded to rue21.
Get a protection plan on all your appliances
Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.
Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.
For a limited time, you can get your first month free with a Single Payment home warranty plan.
Plans for growth
Despite the financial setback of the first bankruptcy, rue21 quickly bounced back and began to thrive as a leading teen fashion brand.
In fact, in 2011, the company announced plans to expand its distribution center in Weirton, West Virginia, a project that took a year to complete. The plans included adding 180,000 square feet of storage to its existing 189,000 square feet. At the time, the company had 654 stores in 44 states.
Expanding demographics
Rue21 has historically been associated with fashion for teen girls and young women, though they did try to broaden customer demographic horizons.
In 2013, the company launched several RueGuy stores in New York, Texas, and Ohio. As the name suggests, these stores were targeted at male shoppers, but they still had options for any consumer.
Trending Stories
E-commerce launch
Rue21 was not unprepared for the shift to online retail. In 2013, they launched their e-commerce platform.
While their brick-and-mortar success was booming at the time, they made efforts to stay relevant in a retail climate that was becoming increasingly digital.
The 2017 retail apocalypse
Brick-and-mortar retailers across industries suffered in 2017. Several factors contributed to what is often referred to as the “retail apocalypse,” including the ripple effects of the Great Recession, an overly saturated market, the death of mall culture, and potentially even social media’s growing popularity.
However, one of the likeliest contributors to this mass-scale shuttering of in-person retailers was the exponential popularity of e-commerce.
The second bankruptcy
Rue21 was one of several companies that took a serious hit during the retail apocalypse — 3,500 stores were projected to close, and rue21 was right with them.
The company filed for bankruptcy again in 2017, which led to a reduced $700 million of debt. Additionally, 400 stores were shuttered throughout the country.
A quick bounce-back
Despite the financial setbacks, rue21 bounced back relatively quickly from its second bankruptcy filing and emerged later that year.
The company refocused efforts strategically, including ending its professional relationship with Trade Global, its fulfillment partner at the time, and hiring contractors to improve e-commerce operations. Rue21 also hired a new merchandising officer who focused on “female-focused brands.” A total of 420 stores closed during this bankruptcy.
Stop overpaying when you shop online
Shopping online has its perks. It's super convenient, but it can be time consuming to find the best deals. Instead of hunting for coupon codes (that don't always work!) and opening tons of browser tabs comparing prices, you can try Capital One Shopping.
Capital One Shopping makes saving money effortless. Just add the browser extension and when you check out, it'll scour the internet for coupon codes to help you save cash. And before you check out at 25+ major retailers, Capital One Shopping will notify you with a friendly pop-up if the item you're buying is available cheaper somewhere else.
Capital One Shopping is free to use and won't show you ads. Add it today and stop overpaying!2
Trying to keep up with the market
Rue21 continued to make concerted efforts to remain relevant and appeal to a wide demographic of shoppers.
In 2020, they took advantage of a market gap and significantly expanded their plus-size range. The company added its plus-size options to 61 additional brick-and-mortar stores, for a total of 318. They also announced plans to expand their designs and ranges.
The third bankruptcy and closing up shop
This brings us to the present, when rue21 has filed for bankruptcy for a third and, it seems, final time.
The retailer will close the remaining 540 stores, and their website is inactive. Additionally, they plan to sell all intellectual property.
Lack of buyers and next steps
Despite ongoing efforts to remain relevant in several aspects, rue21 floundered even after a relatively successful comeback from the retail apocalypse. The former retail giant did make attempts to sell the business but ultimately found that it would be more profitable to shutter stores and liquidate inventory.
While the site is down, bargain shoppers will likely find going-out-of-business sales at local brick-and-mortar stores. The company has hired Gordon Brothers, a Boston-based company specializing in valuations and dispositions, to handle their bankruptcy.
Bottom line
After a more than 50-year run with several ups and downs, customers must now say goodbye permanently to rue21, a brand that was once a staple in the closets of teens across the country.
They’re not the only millennial fashion retailer and mall favorite to file for bankruptcy, though, as more shoppers choose to save money at Amazon and other e-commerce outlets instead of paying inflated mall prices. Express also filed for bankruptcy and announced several store closures earlier in the year.
With former iconic brands and stores either closing or significantly scaling back operations, the future of fast fashion retail remains to be seen.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 19.74%, 24.74%, or 29.74% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
Subscribe Today
Want extra-cash moves to come right to you?
Stop browsing endlessly. Get proven ways to earn pocket money, help cover rent, and crush your debt — sent to your inbox daily.
Author Details