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.