The Rue21 Inc. teen specialty chain, after experiencing rapid growth across the country, has initiated a shake-up in its top management, ousting chief executive officer Robert Fisch and bringing talent in from the outside.

The company said the board has launched a search for a new ceo, but did not provide a reason for Fisch’s sudden departure. The teen specialty sector has been troubled in the last few years and last month mall operators Simon Property Group and General Growth Properties were among an investors’ group led by Associated Brands Group that bought Aéropostale out of bankruptcy to keep the chain operating.

At Rue21, Keith McDonough, the chief financial officer, has been appointed interim ceo. He 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.

The company also appointed Nina Barjesteh chief merchandising officer and Elizabeth Hodges chief customer officer, a new position.

Barjesteh, who has more than 20 years of experience in the retail and fashion industry, joins Rue21 from Target Corp., where she was vice president, general merchandise manager of the women’s apparel division. She will be responsible for all  merchandising initiatives. Barjesteh succeeds Kim Reynolds.

As chief customer officer, Hodges will oversee brand marketing and advertising initiatives. She joins Rue21 from Chico’s FAS, where she spent nine years, most recently as senior vice president of customer experience. Earlier in her career, she worked at J.C. Penney Co. Inc., American Eagle Outfitters and Lane Bryant.

Keith McDonough said: “We thank Bob Fisch and Kim Reynolds for their 15 years of collaboration and passion in building Rue21 into a leading teen specialty apparel retailer. We are very excited to have Nina Barjesteh and Liz Hodges join the Rue21 leadership team. They both will play key roles as we further position our business for long-term growth.”

Based just outside Pittsburgh in Warrendale, Pa., Rue21 operates 1,213 stores in 48 states. It’s been a private company since 2013.

The company plans to open about 40 stores and upgrade 100 existing stores in fiscal 2016. The company also said e-commerce sales grew 90 percent in the first six months of the current fiscal year. Rue21 is launching ship-to-store and CRM this year.

“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, composed 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.”

Fitch Ratings, as part of an analysis of many retail companies, identified seven U.S. retailers facing significant default risk within the next 12 to 24 months. They included Rue21 as well as  Sears Holdings Corp., Claire’s Stores, True Religion Apparel Inc., 99 Cents Only Stores, Nebraska Book Co. and Nine West Holdings Inc. and Rue21 Inc. Rue21 and True Religion were cited for concerns over their institutional term loans.
“In the fickle teen fashion market, it’s particularly important to pass the mantle on to the next generation of leaders,” said Craig Johnson, president of Customer Growth Partners. He added that Rue21 was “always at its best in its core niche — small towns and small cities America in small malls or strip centers where they would be the only game in town for current teen fashion. Over the last four or five years, they went nearer to, if not in, major cities and have been suddenly facing four to six competitors. They have tried to reposition themselves as a fast-fashion player at precisely the time fast fashion has been decelerating, with the exception of Zara.” He said Rue21 represents “yet another sad saga of a longtime ceo overexpanding a concept outside of its niche — and hanging on too long while the world moved on.”
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