Specialty apparel retailer rue21 has appointed CFO Keith McDonough as its interim CEO, replacing 15-year veteran Bob Fisch, who has left the role. The retailer’s Board of Directors is presently conducting a search for a new CEO.
Kim Reynolds, who served as General Merchandise Manager, has also left her position. As part of the executive shakeup, rue21 has replaced Reynolds with Nina Barjesteh, who will serve as Chief Merchandising Officer and be responsible for all merchandising initiatives. Barjesteh joins rue21 from Target, where she served as the VP and General Merchandise Manager of the Women’s Apparel Division.
The retailer also appointed Elizabeth Hodges to the newly created position of Chief Customer Officer, which will focus on brand marketing and advertising initiatives. Hodges joins rue21 from Chico’s FAS, where she spent nine years as an executive, most recently as Senior VP of Customer Experience.
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The circumstances of Fisch’s and Reynolds’ departure have not yet been revealed, but rue21’s recent financial struggles could give a hint as to why the turnover occurred.
Rue21 was named in a Fitch Ratings agency report as one of seven retail chains at risk of defaulting within a year. Other retailers named in the report include Sears Holdings, Claire’s Stores, True Religion, 99 Cents Only, Nine West and Nebraska Book. These brands all have been hit with difficulties stemming from the competitive challenges facing brick-and-mortar stores, including the rise of e-Commerce, declining mall traffic and the ebb and flow of brand popularity.
Despite the poor outlook from the Fitch report, rue21 is still planning to open approximately 40 new stores and upgrade 100 existing stores in its 2016 fiscal year. The retailer indicated in a statement that e-Commerce sales grew 90% in the first six months of the current fiscal year. Rue21 also is launching several new, customer-focused initiatives such as ship-to-store and CRM.
“We continue to execute on the strategic initiatives we set out for 2016 and the longer-term, including strengthening our brand, our merchandise assortments and our omnichannel capabilities, in addition to increasing our square footage,” said McDonough. “Our strong management team, comprised of tenured retail executives with deep experience in all aspects of our business, complemented by the addition of Nina and Liz, is well positioned to take rue21 to the next level of growth.”
