Charlotte Russe to Liquidate and Closes All Stores

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Update (March 7 at 10 a.m.): Charlotte Russe plans to liquidate and close all stores in the next two months, CNN reported. The retailer joins the long list of retailers that could not survive bankruptcy. The apparel retailer hadn’t planned to shut down stores, but this changed when liquidator SB360 Capital Partners won the auction in bankruptcy for Charlotte Russe’s $160 million worth of inventory and other assets. This was approved on Wednesday of this week by a bankruptcy court in Delaware.

Original Article (February 4)

Mall-based women’s apparel retailer Charlotte Russe has been added to the ongoing list of troubled companies in the sector, announcing its plans to file for Chapter 11 bankruptcy protection and close approximately 94 stores.

The company will keep the other 400+ Charlotte Russe and Peek Kids stores open through the process, along with its ecommerce site.

In a court filing Monday, Charlotte Russe said it had “suffered from a dramatic decrease in sales and in-store traffic” and struggled with “the burden of maintaining a large brick-and-mortar presence,” according to CNN.

The company was purchased in 2009 by private equity firm Advent International for $380 million in a cash-for-stock deal. In 2018, it reached a deal to reduce its debt from $214 million to $90 million, CNN reported.

But still sales remained challenged, falling 12.3% to $795 in 2018, from $928 million in 2017, in a strong economy with many retailers seeing revenue grow. Same-store sales fell 11.7% in the third quarter of 2018.

Charlotte Russe said it has received a commitment for $50 million in debtor-in-possession financing. If approved, it would support operations and administration during the Chapter 11 proceedings.

The company has filed several motions in U.S. Bankruptcy Court seeking authorization to continue operating its business, including paying employees and past due amounts to vendors and providers.

 

 

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