In a move signaling further distress within the brick-and-mortar retail sector, teen clothing retailer Rue21 is shuttering all of its 540 stores nationwide. The company's Chapter 11 bankruptcy filing, which was initiated on May 2, has been followed by plans to commence going-out-of-business sales across its locations, as reported by the Chicago Business. Illinois will see the loss of 20 Rue21 stores situated mainly in suburban shopping centers like North Riverside Park Mall and Woodfield Mall in Schaumburg.

Decimated by the early months of the COVID-19 pandemic, many shopping malls and their retail tenants, like Lincolnwood Town Center, have struggled to recover. The center, facing a foreclosure suit early on, remains on the hunt for a buyer two years down the road. In a statement obtained by the Chicago Tribune, Rue21's interim CEO Michele Pascoe cited persistent challenges from the pandemic and the rise of online shopping as key factors in the brand's downturn.

Employing nearly 5,000 workers nationwide, the company's closures signal a substantial loss of jobs – approximately 1,500 are full-time positions, with an additional 3,500 part-time. This predicament arrives on the heels of another mall-based retailer, Express, declaring bankruptcy late last April. Rouged by retail instability, Rue21's CFO Michele Pascoe, told Chicago Business that liquidation was seen as the most viable option for satisfying creditor requirements over maintaining business operations.

With a history of financial restructuring, having previously emerged from Chapter 11 in 2003 and 2017, the Pennsylvania-based company struggles to survive the relentless storm that is reshaping the retail landscape. The company's decision to wind down operations marks the end of an era for the chain founded in 1976, once a staple in American suburban shopping experiences.