Charlotte Russe to Liquidate, Close All of its Stores
Charlotte Russe will close all of its stores over the next two months. The women's clothing company joins a growing group of retailers that couldn't survive bankruptcy. The company didn't want to shut down. It filed for bankruptcy protection a month ago and announced plans to close only 94 of its 512 stores nationwide. The goal was to use the bankruptcy process to shed debt and sell to a buyer that would keep it in business. However, those hopes fell apart this week when liquidator SB360 Capital Partners won the auction in bankruptcy court for Charlotte Russe's $160 million worth of inventory, and other assets. A liquidation plan was approved Wednesday by the bankruptcy court in Delaware. All Charlotte Russe stores will be closed by the end of April.
Total Retail's Take: Perhaps no sector has been hit harder by the struggles of brick-and-mortar retail than the mall-based specialty apparel retailer, which Charlotte Russe falls squarely into. Charlotte Russe was acquired by in 2009 by private equity firm Advent International for $380 million, a deal that left it with $175 million of debt that was due in 2014. Couple those debt payments with a slowdown in sales, hastened by a decrease in store traffic, and Charlotte Russe found itself in a position where a bankruptcy filing was its most viable option for survival. After being acquired during auction by a liquidation firm, we've unfortunately seen the end for another traditional brick-and-mortar retailer.
Joe Keenan is the executive editor of Total Retail. Joe has more than 10 years experience covering the retail industry, and enjoys profiling innovative companies and people in the space.