Red Lobster and rue21 are two companies that have recently filed for bankruptcy, raising concerns about their future. Red Lobster is facing the possibility of going bankrupt, which has caused worry about the fate of their famous cheddar bay biscuits. Meanwhile, fashion retailer rue21 has filed for Chapter 11 bankruptcy and plans to close all of its stores, including more than a dozen in Indiana.
According to Reuters, rue21 plans to shut down all 543 U.S. stores within the next two months and conduct large “going out of business” sales. The company also intends to sell its intellectual property. As of Friday morning, rue21 has not issued a press release or made any public comments about the bankruptcy.
Indiana customers will no longer have access to rue21 stores, as the company listed 17 locations in the state before filing for bankruptcy. This is not the first time rue21 has faced financial troubles, as they previously filed for bankruptcy in 2003 and 2017. The company currently has around 4,900 employees and $194.4 million in debt.
Founded in 1970 as Pennsylvania Fashions Inc., rue21 has undergone multiple name changes and bankruptcy filings over the years. Despite attempts to sell the business, the company was unable to find a buyer willing to pay more than what it would earn through liquidation. Now, rue21 has hired financial consultant Gordon Brothers to assist with store closing sales.
The closure of rue21 stores highlights the challenges faced by brick-and-mortar retailers in a rapidly evolving market. As retail businesses adapt to changing consumer preferences and online shopping trends, it is clear that some companies may struggle to survive in this new landscape.