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Rue21 opening new stores as business returns

rue21 storefront

Rue 21 is expanding at a time when many specialty clothing retailers are downsizing.

The teen apparel retailer, which is will open three new brick-and-mortar stores this July. The new locations, in Sourth Carolina, Tennessee and Texas, will bring the chain’s store count to 673 in 45 states.

  Rue21  said it  has experienced a business uptick since emerging from the Covid-19 shutdown and is outperforming every metric including sales, comparative year-over-year sales and EBITDA.

 Similar to most retailers, Rue21 responded to the global pandemic in March by shuttering its stores and furloughing most staff, pausing scheduled incentive bonuses, but continuing to provide employee healthcare benefits. When some states began to reopen in May, the retailer safely opened 180 stores, electively erecting behind-the-counter "sneeze shields", installing touchless payment technology and training staff on stringent safety protocols.

"During this unprecedented time, belts were tightened -- but the executive team continued to strategize and collaborate in order to prepare for pent up customer demand," said interim CEO John Fleming. "We fully expected all areas of commerce to take a hit, but to our surprise, our customers were anxious to purchase affordable, fashion-forward pieces that fit into their new way of life.  As a result, we beat out last year's comparables with a record June in terms of gross margin."

   Fleming, who became interim CEO at the start of 2020, has directed a more streamlined approach toward promotions, store operations and management structures, focusing on speed to market and inventory velocity. As the retailer prepares for an uncertain back-to-school season, it plans to prioritize the timely supply of trend-setting inventory, such as its fashion-print facemasks, and plus-size rue+ offerings.

"Speed to market continues to be a laser focus,” said Fleming. “Trends are changing faster than ever before and we're determined to consistently meet our loyal customers' demands. 

In addition, the retailer doubled down on its customer loyalty strategy, launching a free reward program in April and across all stores on July 9. The  program  gives customers 10 points for every $1 dollar spent -- or a $5 dollar reward for every $75 spent -- and includes exclusive member offers. 

"Unlike many retailers, we are in a better position today then we were before the global pandemic,” Fleming said.

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