Rue 21 emerged from bankruptcy last month, but it’s still in turnaround mode.
The troubled mall-based teen retailer has a new chief executive officer in Michael Appel, who is taking over on an interim basis for Melanie Cox, along with a new board that Appel will also be leading.
Appel said Cox brought Rue through “an orderly and successful Chapter 11 reorganization” and that during her time leading the retailer, it “exceeded its financial goals and stabilized relationships with both the factor and vendor communities.”
He said Cox will be working over the next few months to transfer her responsibilities. As for why Cox is being replaced, a Rue spokeswoman said it was always intended to be a “short-term assignment.”
“Near term, [Cox] is going back home to the West Coast,” the spokeswoman said. “Longer term, she will undoubtedly assume another leadership position.”
Cox said in a statement she is “very pleased with the outcome of the restructuring” and “immensely thankful for all of our business partners who supported us throughout the process.”
She was more forthright in an internal memo sent to Rue staff, and cited difficulty in managing a company based in Pennsylvania while her family remained in California.
“After careful consideration, I have determined that it is not a reasonable situation,” Cox wrote. “The company needs and deserves a ceo who can be here full time, five days a week. And, I need a life that includes my family.”
Cox added that she will leave the company by early November and noted she has worked with Appel “on several projects prior to Rue.”
Appel is the founder and president of Appel Associates, a business consultancy focused on restructurings and turnarounds, but has a history in retail. He most recently served as chairman of Loehmann’s for two years, along with several stints as interim ceo at Baccarat and Wilkes Bashford. Early in his career in the Seventies and Eighties, he was a merchandising executive at Bloomingdale’s and Fortunoff.
Now he’s Rue’s fourth ceo in less than 18 months.
Rue said Appel’s career has given him experience in “every functional area within a retail operation, extensive international sourcing capability and hands-on experience across multiple merchandise categories including apparel, home furnishings and accessories.”
Other members of Rue’s board include Robert Corliss, chairman and ceo of high-end men’s brand Robert Talbott; John Fleming, who formerly served as global e-commerce ceo at Uniqlo after working as a marketing and web executive at Wal-Mart Stores Inc.; Jennifer Gosselin, executive vice president of merchandising for art and craft marketplace Minted; Larry Meyer, a former ceo of Uniqlo USA and former executive at Forever 21 and Gymboree, and Sean Britain, a managing director at private equity firm HIG Bayside Capital, one of Rue’s lenders.
It emerged in September, with then-ceo Cox saying Rue had “consistently” performed above its liquidity plan and exceed earnings before interest, tax, depreciation and amortization targets.
Rue didn’t say exactly how many stores it had closed, but Cox referred to its base of “hundreds,” when it had previously operated more than 1,200.
This was the second bankruptcy for Rue, which filed for the first time in 2002 when it was going by the name Pennsylvania Fashions Inc. It emerged under the new name the following year and went public a year after that.
Rue 21 was acquired in 2013 by private equity firm Apax Partners for $1.1 billion.
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