Teen retailer rue21 changes top leadership
Teen fashion retailer rue21, which has faced criticism that it was slow to adapt to changing industry trends, Saturday abruptly replaced longtime CEO Bob Fisch along with the company’s head of merchandising in a surprise shake-up of key leadership.
The development comes just as retailers are wrapping up the back-to-school season and preparing for the Super Bowl of shopping, the holiday season, which accounts for a significant chunk of the sector’s annual sales. It’s unclear how rue21 fared with back-to-school sales because the private company provides scant details about its finances.
Fisch, who has served as president and CEO since 2001, will be succeeded in the interim by Keith McDonough, the Warrendale-based company’s chief financial officer. The company said Kim Reynolds, the general merchandise manager, will be replaced by former Target apparel executive Nina Barjesteh.
Analysts have been critical of the company for being slow to adapt to Internet sales and for being behind the curve in recognizing changes in teen fashion.
Rue21 was named in a Fitch Ratings agency report on retail bankruptcies as one of seven retail chains at risk of defaulting within a year as shoppers shift to online merchants and spend more on experiences, according to a Bloomberg News report.
Rue21, which operates 1,213 stores in 48 states, last year began to expand its inventory beyond clothing to include room decor, tried to appeal more to men and introduced plus-size clothing. The company has also taken steps to beef up its online presence and respond to competitive trends to offer shoppers options to shop online and pick up their orders in stores.
McDonough has served as rue21’s CFO for 13 years and has “more than three decades of senior leadership experience in the retail industry,” the company said in a statement. Barjesteh, who will oversee the company’s merchandising strategy, most recently was vice president and general merchandise manager of the Women’s Apparel Division at Target.
The company also announced creation of a position to oversee brand marketing and advertising initiatives.
Rue 21 said it plans to open 40 new stores, upgrade 100 existing stores and launch “several new, customer-focused initiatives,” including ship-to-store and improved customer relations. Fisch had announced long-term plans before the company went private in 2013 to have 1,700 stores.
Rue21 said in its statement Saturday that it continues to grow sales in both its stores and online. The company said e-commerce sales grew 90 percent in the first six months of the fiscal year.
But teen retailers continue to face challenges.
Mall visits are “not as popular as something to do for a pastime, particularly among teens,” said analyst Sharon Bonelli, one of the co-authors of the Fitch report. “They’d rather be on their phones and spending their disposable income on things like their electronics or restaurants, coffee shops.”
Bloomberg News contributed to this report.