Rue21, Sam Ash Music Latest Retailers To Shutter All Stores

Nearly 600 storefronts will be vacated by the closures of Rue21, a teen fashion chain typically seen in malls, and Sam Ash Music Stores, a century-old instrument retailer. Both cited online shopping as a notable challenge to their brick-and-mortar businesses. 

Rue21 will close all 540 of its stores in the next four to six weeks, the company said in a Chapter 11 bankruptcy filing Thursday. This is the third time Rue21 has filed for Chapter 11 bankruptcy, with previous filings and hundreds of closures in 2003 and 2017, CoStar News reported. 

Sam Ash Music announced on Facebook Thursday tha it would close all 42 of its locations. Derek Ash, great-grandson of company founders Sam and Rose Ash, told The New York Times that the store could not compete with online shopping. 

Sam Ash, founded in 1924, has stores in 11 states that will all close by the end of July.

These announcements follow two other retailers closing all U.S. locations in the last two months: 99 Cents Only Stores and The Body Shop. 

U.K.-based The Body Shop chain filed for Chapter 7 liquidation in March, when it had about 50 locations operating in the U.S. The Body Shop administrators told Reuters the brand faced “a difficult trading environment for the wider retail sector.” 

Discount retailer 99 Cents Only Stores in April said it would close all 371 of its stores throughout California, Texas, Arizona and Nevada. CEO Mike Simoncic cited shifting consumer demand, inflationary pressures and other “lasting challenges in the retail environment” as reasons for the closure.

The challenges became too much for Sam Ash to keep operating, according to Derek Ash, the brand’s chief marketing officer.

“A lot of this has been the move to online shopping,” he told the NYT. “There are so many choices, and to maintain a store with that much selection is very difficult.” 

Rue21 interim CEO Michele Pascoe in an affidavit cited online shopping and changing consumer preferences as challenges the company faces, according to CoStar. 

“More specifically, the debtors have recently experienced operational losses resulting from, among other things, under-performing retail locations, increased industry competition and the uptick in online shopping, inflation and macroeconomic headwinds, and challenges raising capital,” Pascoe said, according to CoStar. 

While it attempted to financially restructure and solicit bids, it became clear that liquidation was the best option for the company, she said.

More than 300 of Rue21’s 540 locations are in malls, CoStar reported. Rue21 once had more than 1,000 stores.

Overall, national retail fundamentals remain strong. The national average vacancy rate in the first quarter of this year was 4.1%, with limited tenant departures and scarce new deliveries tightening the market, according to Colliers. Malls had a higher average vacancy rate though, at 8.6%, according to the report. 

E-commerce is actually bolstering physical retail in an increasing number of cases, from 27% of online purchases involving a brick-and-mortar store in 2015 to nearly 42% in 2023, according to GlobalData information reported by The Wall Street Journal.