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Mall owners in Florida are again having to deal with more vacant space and the possibility leases are going to be broken as another retail staple enters bankruptcy and starts closing stores.
This time it is teen-fashion retailer Rue21 which filed for Chapter 11 bankruptcy late last week and said it was shutting down all 544 of its stores, including 30 in Florida.
That includes 10 in the region, with three in Tampa and one each in Brandon, Ellenton, Fort Myers, Lakeland, Port Charlotte, Port Richey and St. Petersburg.
The Rue21 bankruptcy comes just a couple of weeks after another mall-favorite Express filed for protection and announced it was shuttering 95 stores, including two in the Tampa market. (The company has said more closing could follow.)
And before Express announced its decision to shut down, Macy’s said it would close 150 stores in the next two years.
While the retailer has not announced which locations it will close locally, it’s hard to imagine all 11 along the Gulf Coast stores will survive given that the closures are focused on “underproductive locations.”
However the final numbers shake out, what is clear is that retailers are continuing to struggle with a challenging commercial environment brought on by both broader economic and retail-specific market pressures.
In Macy’s case, the closures are part of a process to, it says, strengthen its brand, grow its luxury offerings and a modernize its supply chain as it shifts its attention to its remaining 350 stores and expanding smaller-format locations.
And Express says it has found a potential buyer — a group led by WHP Global — and it expects to restructure its finances in bankruptcy and emerge stronger.
Rue21 does not have those options. The Pennsylvania retailer says in court papers that it could not find a buyer and will liquidate its inventory through going out of business sales over the next several week.
According to Reuters, Rue21 has 4,900 employees and $194.4 million in debt. At its peak, it had 1,000 stores in malls throughout the U.S. The company closed about 400 stores during its 2017 bankruptcy, in a deal that allowed Rue21 to slash $700 million in debt.
This is the third time the company has filed for bankruptcy protection.
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