The back-to-school shopping season is almost here, and Rue21 is expanding its physical presence to take full advantage of the festivities.
The specialty apparel retailer will open five new stores before teenagers and young adults head back to their classrooms and 15 new stores in total through the end of 2021. The store opening news comes as Sensormatic Solutions’ third annual back-to-school survey found that 76 percent of the 1,000 U.S. respondents plan to do their preparatory shopping in stores this year. The report, published Thursday, further documented the ongoing popularity of omnichannel services. While 54 percent intend to shop online, more than half will take advantage of a multichannel feature, including 33 percent planning to buy online and pickup in store and 22 percent saying they’ll flock to the convenience of curbside.
Rue21, whose target demographic is the 15-to-25-year-old largely Gen Z consumer, said it generated double-digit growth in 2020 during the pandemic, enabling “aggressive” investment into both its physical and digital footprints.
“Recent new store openings have demonstrated the importance of our store channel to brand discovery and customer acquisition,” Rue21 CEO Bill Brand said in a statement. “Our dynamic in-store experiences have driven customer loyalty and is our model for continued omnichannel growth.”
According to a report from Mastercard SpendingPulse, which tracks retail sales across all channels and forms of payment, apparel is set to soar 78.2 percent year over year from July 15 through Sept. 6, making the back-to-school season a potentially lucrative one for clothing retailers, particularly those that target school-age audiences. Meanwhile, the Sensormatic study, which spanned 750 adults planning for elementary and secondary-school children with the balance responsible for college-age learners, found that 39 percent claim the economy won’t impact their back-to-school spending, with 12 percent stating plans to shell out more than they did in 2020.
Retailers have their work cut out this season making heads or tails out of school opening plans.
“Trying to understand traffic trends when most schools in 2021 are expected to be open necessitates looking back to the most recent year when that occurred, which in this case is 2019,” said Amy Shulman, global head professional services, Sensormatic Solutions. “Doing so not only allows retailers to assess the ever-changing retail traffic environment, but also helps them understand expected shopper patterns, which is critical for staffing and supply chain optimization, such as last-mile delivery.”
In another bit of good news for retail, consumers seem to be abandoning their hangups with indoor, enclosed shopping spaces. A full 73 percent of Sensormatic’s survey respondents say they’re “neutral or unconcerned” about in-store shopping, a 23-percentage-point improvement from the spring, and up from just 35 percent in the winter.
Rue21’s push comes as big names including JCPenney, Kohl’s and Target have also prominently promoted their back-to-school apparel offerings. Walmart is even partnering with the revitalized Justice brand, bringing 140 items from the tween-targeting label into 2,400 of its stores and website as back-to-school rolls around.
The data-driven store push comes a year after the brand, like many apparel companies, battled the uncertainties of the Covid-19 pandemic. Coronavirus disruption’s impacts on merchandising sparked a focus on offerings for both in-person classroom instruction and home schooling, including joggers, tops, denim and face masks.
Fast forward to summer 2021 and the retailer is heavily promoting denim jeans on its website for young men and women across all styles, whether it be skinny, high-waisted, flare, ripped and more. Rue21’s move comes as the apparel industry as a whole is experiencing what Cowen analysts called a “renewed denim cycle” as more consumers refresh their wardrobe for upcoming seasons.
The 15 new Rue21 stores will open in Jacksonville, Fla.; Coral Springs, Fla.; Memphis, Tenn.; Columbus, Ga.; Cypress, Texas; Camp Hill, Pa.; Grand Rapids, Mich.; Madison, Wisc.; Holyoke, Mass.; Buffalo, N.Y.; Oklahoma City; Tulsa, Okla.; Pembroke Pines, Fla.; Waldorf, Md.; and Braintree, Mass.
“Rue21’s marriage of data and customer recognition provides the perfect formula for a winning location. The success of the new stores in 2020 fueled investment in the 15 new stores this year,” added Michele Pascoe, Rue21 chief financial officer. “As we continue to grow the fleet, we can’t wait to welcome more loyal customers to the brand.”
Rue21 currently operates 652 stores in 45 states, and plans to open additional stores in 2022.
Last year, Rue21 opened three new stores in South Carolina, Tennessee and Texas that outperformed the retailer’s expectations by more than 50 percent.
The retailer attributes the stores’ success to its data-driven site real estate selection process, which requires that each location matches perfectly with its customer demographics. Additionally, field teams participate by visiting every site prior to a new location approval.
Rue rewards, the brand’s loyalty program that launched in 2020, has aided the specialty retailer in discovering customer demographics and further helped it make new store decisions. The program is designed to convert new, in-store customers to omnichannel customers, with 5.5 million active members already participating. The year also marked an expansion of its plus-size apparel clothing offering.
Rue21’s performance and financial position allowed it to repay its debt while increasing availability under its asset-based facility with Bank of America and Tiger Finance to $155 million. As of December 2020, Rue21 had $100 million in total liquidity.
Additional reporting by Jessica Binns.