Jobs, Benefits, Business Model, Founding Story

New Rue LLC (“Rue21”) seeks to establish itself as a leading provider of apparel and fashion accessories for younger consumers, offering high-quality, durable, and stylish designs at reasonable prices.

Rue21 traces its roots back to 1970 and the establishment of fashion house Pennsylvania Fashions Inc. Throughout the last years of the twentieth century, Pennsylvania Fashions Inc grew considerably, ultimately establishing a retail network comprising around 250 stores and 1,800 employees.

In 2002, Pennsylvania Fashions Inc filed for Chapter 11 bankruptcy protection.

Pennsylvania Fashions Inc exited Chapter 11 bankruptcy protection in May 2003 as Rue21, having completed a voluntary reorganisation. Following its emergence from bankruptcy, Rue21 set out to expand its retail network into underserved markets across the US.

The company expanded rapidly, opening its 500th store in 2009 and launching its 1000th store in 2013. The company also expanded marked its growth by doubling the size of its Weirton, West Virginia-based distribution centre in 2011.

Like many other physical retailers, Rue21 was badly affected by the so-called retail apocalypse which saw numerous store closures across the US. Rue21 itself announced plans in April 2017 to close around 400 stores.

A month later, the company filed for Chapter 11 bankruptcy protection, and in September 2017 emerged once again from bankruptcy having approved a reorganisation plan with the US Bankruptcy Court.

Rue21 currently operates a network of 718 physical outlets across 45 US states.

In recent years, it has supplemented its physical retail locations with an online store, which ships orders across the contiguous US.

Business model of rue21

Customer Segments

Rue21 sells apparel and clothing accessories to the general consumer market.

According to the company’s own marketing, its products are aimed at consumers that wish to look and or feel 21 years old. As such, the company’s principal customers are:

  • Teens, comprising children aged, both male and female, aged between 11 and 19;
  • Young Adults, comprising consumers in their late teen and early twenties; and
  • Adults, comprising adults in their twenties and thirties that wish to stay in touch with younger fashion trends.
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Rue21 is based in Warrendale, Pennsylvania, a suburb of Pittsburgh. It principally serves customers across 45 US states, with a considerable presence in California, Florida, Georgia, Illinois, Indiana, Michigan, Missouri, North Carolina, Ohio, Tennessee, and Texas. The company does not currently offer international shipping to its customers.

Value Propositions

Rue21 provides value to its customers in the following ways:

  • High Quality Fashions – Rue21 has established itself as a provider high-quality products that are in style and desirable for its target consumer base;
  • Broad Portfolio of Products – Rue21 offers a wide range of apparel products and accessories for both male and female consumers, including outerwear, underwear, shoes, jeans, swimwear, and tops;
  • Accessibility and Convenience – Rue21 makes its products easily accessible to all consumers through its online store, which allows customers to browse products at their leisure, place orders, and schedule deliveries;
  • Extensive National Reach – Rue21 operates an extensive network of more than 700 stores spanning 45 US states, and ships products ordered online to all 48 contiguous US states; and
  • Experience and Expertise – Rue21 is led by a team of experienced executives who have specialised expertise in the retail space.


Rue21 primarily serves its customers through its network of stores across the US, which currently number 718 and span 45 of the country’s 50 states.

The company has a particularly large presence in Texas, where it operates 75 stores; Ohio, where it operates 39 stores, and North Carolina, where it operates 37 stores. These stores are staffed by teams of sales and service personnel make sales to customers directly.

In addition to its brick and mortar stores, Rue21 also operates an online store through its website at  This online sales portal allows customers to browse the company’s products, make purchases, schedule deliveries, manage account details, and access deals without interacting with any sales personnel directly. Customers are also able to buy and spend gift cards through the Rue21 online store.

Rue21’s store network and online sales are supported by its network of warehousing and distribution facilities.

The majority of the company’s merchandise orders and products are processed and distributed from its core distribution centre based in Weirton, West Virginia. The company’s distribution network spans the entire contiguous US.

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Customer Relationships

Rue21 serves its customers directly in-store, and on a self-service basis through its online shop. The company’s stores are staffed by sales personnel who seek to provide excellent customer service to customers, and are able to deal directly with requests, queries, complaints, and product returns.

In addition to hosting an online store on its website, Rue21 also uses its website to provide its customers with information on its store locations, its products, and delivery services.

The company’s website also includes an order tracking service and a store-finding service, which gives customers further flexibility and control in their shopping experience.

Rue21 also publishes an FAQ on its website to further guide customers, and additionally provides an online contact form, through which customers can contact sales and support personnel in order to access more specific information regarding their orders.

Rue21 is also active on social media, operating a number of accounts – including with Facebook, Twitter, Pinterest, Instagram, and YouTube – through which it is able to communicate deals and updates to its customers directly and handle customer feedback.

Key Activities

 Rue21 operates as a specialty retailer of apparel and accessories for young male and female consumers in the US.

Through its network of stores, the company offers a wide range of fashion apparel and accessories, including graphic T-shirts, denims, dresses, shirts, hoodies, belts, jewellery, handbags, footwear, intimate apparel, and other accessories.

The company sells its apparel and accessories under the brand names of rue21, rue21 etc!, tarea by rue21, Carbon and CJ Black, and Carbon Elements. Rue21 operates a network of 718 stores across the US, and operates an online stire, which ships orders across the entirety of the contiguous US. The company was founded in 1976 and is headquartered in Warrendale, Pennsylvania.

Key Partners

Rue21 works closely with a wide network of partner companies and organisations that help to ensure that the company’s operations run efficiently and effectively.

These partners can be organised broadly into the following categories:

  • Supplier and Vendor Partners, comprising merchandisers and manufacturers that provide products for sale across the company’s retail outlets, and third-party service providers that support the company’s corporate activities more broadly;
  • Distribution and Logistics Partners, comprising a range of distribution, logistics, and courier companies that support the company’s warehousing, distribution and delivery operations;
  • Community Partners, comprising a range of non-profit and charitable organisations with which the company collaborates on community projects across the US; and
  • Strategic and Alliance Partners, comprising various other companies and organisations with which the company collaborates on development, marketing, and other strategic projects.
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In 2015, Rue21 announced a partnership with non-profit Together We Rise as part of its philanthropy initiative, under which it donated funds to help disadvantaged children and young adults across the US.

Key Resources

Rue21’s business model depends on its ability to provide customers with high-quality fashion items at reasonable process.

As such, the company’s key resources are its suppliers and supply chain, its network of retail outlets, its storage and logistics infrastructure, its online store, its IT and communications infrastructure, its partnerships, and its personnel.

As noted above, the company operates a network of 718 owned or leased physical retail locations across the US, as well a network of storage and distribution facilities, that are especially key in ensuring the efficiency and accessibility of the company.

Cost Structure

Rue21 incurs costs in relation to the operation of its store and logistics networks across the US.

As such, the company incurs costs in relation to the procurement of merchandise and third-party services, the operation of its store network – including occupancy and utility costs, the operation and development of its online store, the development and maintenance of its IT and communications infrastructure, the management of its partnerships, and the payment of salaries and benefits to its workforce.

Revenue Streams

Rue21 generates revenue through the operation of physical and online retail outlets. The company generates the bulk of its revenue through the collections of fees from customers at point of sale, including both physical and digital sales.

Rue21 is a privately owned company and as such it is not obliged to disclose its financial figures to the public. According to reports, in 2016, the company generated annual revenue of USD 1.14 billion, up around 1% on its revenue figures for 2015.

The company recorded profit for the year of USD 54 million before interest, taxes, depreciation and amortization, down 48.5% from 2015.


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