Behind the Bankruptcy: Rue21 Employees Speak Out on Misconduct During Company Collapse
This is their story
It’s not every day that I get insider information like this.
Are you ready?
Brew your coffee, friends, and have a seat. Because this is not simply a bankruptcy story, this is ego, spite, infighting, and disastrous business decisions.
This is the story of those in the room who weren’t decision-makers.
This is the story of regular people who saw abhorrent behavior and shockingly bad choices being made but could do nothing. Nothing but execute, be quiet, or quit.
Thousands of people are scrambling to pay their bills, find new jobs, and sort through the wreckage this bankruptcy is leaving in its wake.
This is their story.
Everyone needs to hear it.
When I first saw the news of rue21 going bankrupt and closing its stores, I thought, "Rue, who? Oh, that store." Rue21 is a mall staple, but I rarely shopped there and didn’t know much about them.
Nothing about the bankruptcy news seemed super wild at first. Retail companies have been collapsing in recent years due to their refusal to innovate (*cough* Express *cough*).
But then TikTok fed me an appropriately-timed video.
(Of course, they did).
While mindlessly scrolling, I stopped to watch a video about the bankruptcy and closure of rue21 stores. The woman in the video was furious at the company and had a long list of complaints.
Hmmm.
I closed the app and headed to my office, but I couldn't stop thinking about it. I scribbled a note in my planner to do some more research about rue21. The claims on that TikTok video didn't feel random.
One employee didn't have a bad experience. It seemed much, much bigger.
Before leaving the office on Sunday afternoon, I speedily wrote a LinkedIn post about it.
I wanted to give rue21 employees the chance to tell their stories. I hoped to get some messages, but I didn't think the post would get much reach.
I woke up on Monday to seventeen DMs.
The people are furious.
The GNC Insider
Rue21's CEO, Josh Burris, was hired in March 2023. He was CEO of GNC for two years before joining the Rue team.
An insider at GNC stated that Burris was terminated from the company while on vacation. He was fired because he "kept taking vacations and just driving around these absolutely insane vehicles and showing off his money."
This statement alludes to his ineffectiveness as CEO and claims he was largely absent. However, those were the only details I received about his termination.
Josh Burris was allegedly upset about losing that job, and insiders claimed he wanted vengeance.
After he left GNC, Burris landed the job as CEO of rue21 and later became a board member of Vitamin Shoppe, a direct competitor of GNC. The insider stated that he was feeding Vitamin Shoppe information about what business strategies GNC had in place.
The GNC insider said that Burris began taking executives from GNC and giving them significant raises to go to rue21 as payback for his termination.
"When I say pay raises," the insider states, "these are not cheap jobs. These are positions paying $400,000 each. He took the chief merchandising officer, chief strategic officer, and chief people officer."
The insider continues,
"He also took their whole teams as well. So, he would take, you know, twenty or thirty people at a time from GNC. He left the HR department in absolute shambles. He's been doing this up until three months ago. Josh took these executives out of jobs they'd had for years."
"When Burris was hired at rue21, he was given a year to turn things around. Instead, he hired a bunch of people, paid them ridiculous salaries, and fired the Rue people. He utterly fucked GNC out of spite by taking officers who were in the middle of huge projects. We're still trying to rebuild."
The GNC insider confidently stated that rue21 hired Burris to turn things around within one year. I verified this with them. If you only hear from the rue21 employees, you may think the company wanted to fail.
Because Burris allegedly did everything to ensure rue21 ran right into the ground.
Rue's Rocky History
Please note:
I've changed all the names of the employees I'm quoting to protect their identities. Any similarities with former or current employees are coincidental.
Rue21 filed for bankruptcy in 2003 and 2017. In 2017, it closed 400 stores and cut $700 million in debt. This year, rue21 tried to find a buyer but couldn't. The company currently operates 540 stores.
Reuters reported that rue21 struggled after its bankruptcy in 2017 and was hard hit as consumers moved to shop online en masse during the COVID-19 pandemic.
However, reading the barrage of employee messages reveals a company that has been in turmoil for years.
"Rue21's bankruptcy and closure really started in 2016-2017, the last time they filed bankruptcy and closed hundreds of stores. The plane's nose was pointed straight down, and it just took this long for it to hit the ground." - Tim, corporate employee.
Tim alleges that the executives at rue21 were dysfunctional and that "massive infighting" went on. He claims that egomaniacs were "rampant" and "all-in on the hustle-bro culture."
Some executives thought "everyone in the field should be working 70-80 hours per week." These hustle-bro executives also liked to flex their power. Tim alleges that one executive directed a "regional manager to fire a store manager because he didn't feel like she 'showed enough interest' in what he was saying during a store visit."
The store manager had to step away to help cashier because the store was short-staffed. If you've ever worked in a store, you'd know that customers come first. Let me guess: This executive had never worked on a retail floor.
In the spring of 2017, the company arranged a Friday conference call for all the managers to discuss an article in the Wall Street Journal that claimed the company was about to file for bankruptcy.
Tim alleges that one of the most senior executives in the company began screaming on the call, stating that the company was not filing for bankruptcy and "everyone needed to focus on doing 'your fucking jobs' instead of worrying about a news article."
On Monday, "about 50% of the field was let go, and 400+ stores were closed. All less than 72 hours after this executive told everyone that everything was fine."
Lies and abusive behavior from senior executives were present in all the messages I received from employees, even before Josh Burris' time with the company began.
The Last Year
The leaders in the field were hopeful about new leadership.
"We knew the company was in a rough patch, but since Josh Burris was brought in about a year ago, there's been nonstop talk about big progress and how he was going to transform things: get us the product we need, put the right people in the right places."—Amy, Store Leader.
However, as time progressed, Amy realized that all the promises were just "empty talk."
Amy claims that six months after Burris joined the company, "every single regional manager got fired with absolutely zero notice." These were "incredible leaders and had been with the company for years."
After that shocking event, with teams in the field still reeling, Burris hired two Zone Vice Presidents to help run the company.
"After doing some digging on LinkedIn, it was clear that these were friends of Josh,” Amy claims.
Once these Zone VPs were in place, things really got bad. Employees claim that district managers were left in the dark, touch bases were brief and vague, and the field teams received little direction.
Another rue21 employee, Melissa, shares Amy's point of view.
After Burris came on board, a new director of stores was hired. "It continued to get worse. They fired all of the regionals, then hired two zone vice presidents that were not qualified. They only hired people that they knew and got rid of everyone else."
Other employees shared similar frustrations, and if we look back to our insider at GNC, we can see that this information begins to align. Burris appears to be ousting the rue21 leadership to make room for those GNC executives, pay them more money, and ultimately stick it to whoever fired him from GNC.
What's not clear is whether Burris has any idea what he's doing. From all these insider accounts, it's like he's live-action role-playing (LARPing) what he thinks a CEO would do because he has no idea.
He's allegedly fired from GNC, so he partners with Vitamin Shoppe to hand over retail health secrets. Then he lands this rue21 gig, but instead of striving to make the company money, his sole focus is draining GNC of its executives and grounding rue21.
While also LARPing as a "tough guy" CEO.
The accounts from people in the corporate office who were there on Josh's first day are staggering.
Olivia's Accounts
A corporate employee, Olivia, was in the office on Burris' first day. She attended an introductory meeting with other colleagues on her team. She describes a culture of toxicity and fear.
Olivia was so shocked during this meeting that she began taking notes on her phone to remember the wild details. She messaged me about it all.
Here is her account of what she witnessed in the meeting and her claims of bad business decisions that caused the company to collapse. On purpose? Only Burris knows the answer to that question.
He wanted us to eat each other from the inside out.
Many of the C-level executives who were there prior to Josh are absolutely incredible people and leaders. Unfortunately, when Josh stepped in, it was the most toxic version of an adapt-or-die situation, and if the C-suite did not agree with him, they were fired.
Our corporate teams were gathered in one room for a "meet and greet" with Josh, who was an hour and a half late to the meeting.
This was clearly done intentionally, as he was not in another meeting prior, and it was very obviously a sweat-it-out situation. He deliberately kept everyone in that room past regular working hours to see who would stay and who would go; that was our first test.
The very first thing he said was, "So, you're on the merchandising team? I have a question for you. Why do our stores look so bad?"
We were not visual merchandisers. This man had no clue what he was doing.
He spoke in the third person throughout the entirety of the meeting.
"Josh is a winner!"
"Josh only surrounds himself with other winners!"
"You'll only make Josh mad if you don't try hard enough, and if Josh is mad, you will know."
He told us, "If you aren't a winner, then there's the door and leave now. If you're not a winner, maybe you go work for a nonprofit or a charity or something."
He told us that the next day he was going to ask every district manager to put together a written list of stores and store employees that "sucked" so he could weed out the losers immediately.
He said, "If you see something dumb, say something!"
He outwardly encouraged us to backstab our fellow corporate employees and go directly to him or our department heads to badmouth any small decision another employee made, creating a hostile work environment.
He wanted us to eat each other from the inside out.
Olivia's Accusations Continue
Rue21 was known as being an incredibly LGBTQ-plus-friendly store.
Our Pride collection always drove so much positive marketing and user-generated content and made us SO much money!
When Josh stepped in, it was already Q2. The Pride collection had been planned for months, the inventory was in our warehouse, and we were literally just about to hit go.
Josh directed our inventory team not to send out the Pride capsule collection. He told the marketing team to take it out of the windows. He told the visual merchandising team to hide it in the back of the store. I'm not kidding; he wanted it gone.
The paragraph about inclusivity was removed from our website.
The same thing happened with Black History Month. Without explanation, we had to cancel the product. The minimal product we received was sent out to stores and hidden. In-store signage was thrown away. Marketing campaigns were left unpublicized. Not only did we not make money from the collection, but we also lost money on all the efforts we had already made to promote the capsule.
Josh explained, "We are a fashion retailer. We don't need to take a political stand or make social commentary."
Now, you could argue that he might be right, except on paper, the financial results told us he was wrong. And we knew our member demographics backward and forwards.
He wanted to be a leader who ruled with fear and not respect. He intentionally made comments in every meeting to pit departments and employees against each other and create a tense atmosphere.
Under Josh's direction, we were forced to cancel finished goods on vendors. Debatably worse, vendors would ship us inventory, and we would be consistently late on payment, to the point that they grew weary of shipping us any further inventory. This ultimately led to Q3 and Q4 sales—we didn't have enough inventory to make the sales plan needed to stay in business because of Josh's direction and how we treated our vendors.
Other employees I heard from made claims about abusive conference calls.
"I will never forget sitting on an all-store conference call that lasted well over an hour with the CEO telling us we should FIRE all the losers, while simultaneously calling us Store Managers losers for not hitting our unrealistic targets with little to no product, direction, staff, and changing policies/procedures that DID NOT work." - Quinn, rue21 store leader.
"I'll spill all the tea. I don't care."
Employees are Reeling
The company was allegedly firing tenured regional and district leaders and then turning around and bringing in new executives that Burris knew from his previous work experience.
It's not uncommon to bring in people you know; however, firing tenured field leaders for no reason seems odd. Was it really to ruin GNC?
"He hired all his friends in executive positions and gave them hundreds of thousands in signing bonuses. He even created positions that did not exist previously for his friends to join the team." - Kendra, a corporate employee, alleges.
One field leader claims the company announced contests for stores and customers, but the promise of cash payouts was misleading.
There were "no real winnings. Money the company clearly didn't have to spend. Store management across stores have spent years working hard, dedicating themselves towards the goals of the company, promised merit increases that never came." - Jax, a field leader, claims.
I received this accusation in most of my messages from employees. Employees claimed that field leaders had not received raises for the past three years and that sales bonuses were unattainable.
The way rue21 is mismanaging this bankruptcy has people torching the company online. They want to see it burn. They're furious, sending me messages like,
"I'll spill all the tea. I don't care."
"He knew for a month that we were going down and never communicated any sort of issue to us, told us that we were getting a loan and all would be well. The best part is HE let himself go the day before we filed [for bankruptcy] like a coward, and on Wednesday, he and his executive friends, who drove the company into the ground, went to get a steak dinner while all our employees were waiting to know if they had a job the next day. We were all fed lies." - Kendra, corporate employee
The Last Month
Rue21 employees allege that Burris followed this burn-a-company-to-the-ground-checklist
Fire tenured leaders from every department
Hire friends (or maybe pull executives from GNC out of spite)
Lead with intimidation and fear
Tell everyone it will all be okay
Move out of the office
Take friends to steak dinner
Stiff the rest of the teams
Move on to another company
Check, check, check.
No big deal.
Managers in retail are suckers, right?
What do they know?
Except they're not; now they have the power of social media and can share notes.
The last month has been wild for all rue21 employees, and many are reeling and wondering how they will pay their bills.
Store Leaders are Heartbroken and Angry.
They're Also Not Stupid.
"The real problems started developing in late February when product slowed down, and payroll cuts were required in ways that forced stores to lead with extreme pressure and unrealistic coverage during operating hours.
The writing was on the wall. Yet lies were continuing to be told to us by corporate heads." - Store leader Matilda claims.
When shipment began slowing, teams knew something was wrong.
"He had his operations team slow down shipment and do a 'store's rebalancing' for eight weeks, claiming the transferring from store to store was to ensure the right product in the right stores, but it was actually to empty slow traffic stores quicker so we all would rid product at the same rate.
He then had his buying team refuse to buy any more product and claimed we were too heavy in clearance, that until June we would not receive any more product until we rid clearance. The real reason is because we already sold our spring product to another company and we didn't have enough money to buy enough product for back to school.
He started this process over a month ago but told us leaders we weren't closing and we're financially okay! We were just told last week that our ship-to-home system would be turned back on before back-to-school! He deceived us when we knew things seemed odd!" - Field leader Jessica alleges.
Stores were struggling. No clear answers were given, and payroll was restricted.
"We were never getting answers, and everything was consistently being ‘bubbled up.’ They also expected us to run stores on 100-110 hours of payroll and have every zone covered (maybe in very low volume locations but malls it's not doable)." - Zoe, rue21 store leader, alleges.
Many employees claim they were not paid for their PTO or benefits.
"I have mileage checks I never received; our PTO system was a joke. There are no benefits for expecting parents, and even when they tell you your PTO will cover your leave and you've confirmed it with both your DM and the HR department, they don't send a dime, and it takes a week to even get you back into the system because when you take leave, they remove you entirely with no access to anything." - Emily, rue21 store leader.
Information was restricted, and employees were blindsided.
"I found out my store was closing through an overnight express delivery of our liquidation signage. I didn't receive execution guides until the day of the sale." - James, rue21 store leader.
It’s not only employees affected but also entire families.
“I am ONLY at my store now for my girls, one of whom is seven months pregnant. The other has five children. These are people trying to provide for their families. This could have been handled differently, but instead, we have been given the message loud and clear that we do not matter. We are heartbroken. We are angry.
Our liquidation representative also told us that in his 23 years of doing this work, he has never seen a company handle a liquidation this poorly.” - Tierra, rue21 store leader.
“We must hear these accounts.”
It's taken me days to sort through all the messages I've received and organize the claims about the company's misconduct. I had to cut an enormous amount of information; otherwise, this article would've been my next book.
We must hear these accounts. It demonstrates how people at the top often use and abuse the people they oversee.
They lie to them, deny them dignity and pay raises, and treat them as expendable.
(allegedly)
It's gross.
"I've worked for the company for seven years. We've had no direction about what to do. No timeline has been given as to when I'm done. The worst part is no severance. Seven years dedicated to a company for nothing. Stores have started just walking out, and now they are saying that surrounding stores will have to help close other stores," - Max, rue21 store leader.
Rue21's Employees are Rightfully Furious
Rue21 wasn't just another retail casualty. We can't simply chalk it up to customers shopping online or the COVID pandemic.
While the retail industry has struggled, rue21's demise goes beyond mere market forces. It's a story of a toxic corporate culture cultivated by top executives, characterized by lies, bullying, and self-serving decisions that ultimately destroyed the company and the livelihoods of its employees.
Burris allegedly alienated experienced rue21 leaders, replaced them with his friends (or maybe just former GNC execs), and established a cutthroat, destructive environment. Diversity and inclusion efforts, which were demonstrably profitable for rue21, were sacrificed due to a narrow C-suite vision.
Or was it incompetence driven by arrogance and vengeance at GNC?
Employees became pawns in a game Burris was determined to lose. Stores were starved of inventory, payroll was slashed, and the CEO allegedly enjoyed lavish dinners as the company teetered on the brink.
The news of closure came not with transparency but with a pre-recorded video and liquidation signs delivered overnight to a stunned field team.
Rue21's employees are rightfully furious.
They were lied to, disrespected, and ultimately abandoned. Their stories paint a horrifying picture of a corporation deliberately imploding under the leadership of a self-serving executive team. Theirs are not just the voices of disgruntled workers; they are a testament to a colossal failure of leadership and a cautionary tale for the future of retail.
Everyone who works so hard to move retail forward—field teams and corporate teams alike—should be led with transparency and shown respect. This toxic hustle culture and corporate caste system are why fantastic talent is fleeing the industry.
When we are given the incredible honor of leading people and making a difference in their lives, we must use it for good. Rue's C-suite has shown us the wrong way to go about it.
Kit Campoy is an author and retail expert with 20+ years of experience leading retail teams. She thrived on building relationships with customers and motivating sales teams. Now, as a ghostwriter, she leverages this people-centric approach to craft compelling content that resonates and ignites brand loyalty.
Please share this article and 🖤 it on Substack so more people can find it.
Thanks. You’re literally the best.
I am one of the Corporate team members that was flushed out Wednesday due to a "Maintenance Emergency" then told in a pre-recorded message Thursday morning that we were out of work, and at midnight that night, out of benefits. I came here 6 months ago to improve the quality of life for my wife and 3 children, with promises of incentive raises and bonuses, only to find out the week before the collapse all of that was a lie and hadn't occured for years. Every single vendor of ours was shut off - we had no clothes to sell and no way to market them since Easter. What a shame, because with the exception of the aforementioned C-Level execs in your article, the employees of rue21 are some of the hardest working ones I've ever met or had the privilege to work with. Good luck to all finding your next adventure, with the obvious omission of Mr. Burris.
This is bonkers, I hardly know where to start! I still can’t get past the lovely Josh referring to himself in the third person. 😳 I hope employees come out of this with their sanity and some cash in their pockets (in other words, that Rue21 gets sued). Absolutely brutal.