Rue21 is out of business. It had 540 stores and 4,900 employees. It said the primary reason was the spread of e-commerce across the industry. Further, it said that the trend in e-commerce had started to affect it during the COVID-19 pandemic. As Amazon and the largest online retailers in the nation grow, the question is whether Rue21 is the last victim.
Management said, “under-performing retail locations, increased industry competition and the uptick in online shopping, inflation and macroeconomic headwinds, and challenges raising capital.” Macroeconomics seems like a weak argument because the economy has been so strong. Inflation may be a good reason. Labor costs and some of the items used in clothing have a reason. Rue21 catered to teenagers. The company’s primary demographic was people between 13 and 21.
However, Rue21’s teenage target does not seem like a reasonable trigger. Abercrombie & Fitch Co. (NYSE: ANF) shares have soared 46% this year. It is a better-known brand than Rue21 but has a similar demographic profile. However, Abercrombie & Fitch store count is modest at 729.
Among the reasons given, only e-commerce is likely to be the cause. Many retailers have faced Amazon.com Inc.’s (NASDAQ: AMZN) growth. It has been said that Amazon destroyed much of the bricks-and-mortar economy. Since no other argument makes sense, Rue21 may have been another chain that could not handle massive e-commerce competition.
ALERT: Take This Retirement Quiz Now (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
