May 30, 2024

Iraic

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Wave of Bankruptcies Hits Major Retailers in the U.S.: Thousands of Employees at Risk

1 min read

Another renowned fashion retailer in the United States has been forced to close. The closure of its 540 stores will leave workers in an uncertain situation.

The insolvency of companies, especially in the retail sector, is an unwanted but sometimes inevitable process, involving asset liquidation and the cessation of operations. This arises when debts accumulate or market conditions are adverse, making it difficult to generate sufficient revenue. In some cases, companies try to reorganize before total liquidation, negotiating with creditors under bankruptcy laws to stay afloat.

Fashion company Rue21, based in Warrendale, Pennsylvania, has announced its bankruptcy for the third time, opting to close its 540 stores. This move adds to a series of retailer closures such as The Body Shop and 99 Cents Only. The company plans to close all its stores within the next 4 to 6 weeks and is considering selling its intellectual property.

Let’s remember that in 2017, Rue21 filed for bankruptcy and closed approximately 400 of its 1,200 stores, repeating this situation in 2002. Another example is the closure of 371 stores of the 99 Cents Only Store chain, marking the end of a 42-year tradition. The cited reason is economic difficulties exacerbated by the COVID-19 pandemic, changes in demand, and inflationary and unemployment factors.

These closures reflect the persistent challenges facing retail chains in the United States, leaving thousands of employees jobless. Bankruptcy, liquidation, closure, employees, insolvency, debts, reorganization.

Published by Iraic.Info, a news and information agency.

 
 

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