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.