Charming Charlie Files for Bankruptcy, to Close All of its Stores
Fashion accessory retailer Charming Charlie will close all of its stores after going bankrupt for the second time in less than two years. The company filed for Chapter 11 protection in Delaware with plans to close all of its 261 stores in 38 states, according to court documents via Bloomberg News. The chain expects the liquidation to take about two months, and more than 3,000 full- and part-time employees could lose their jobs. Charming Charlie closed about 100 stores during its previous bankruptcy, which began in December 2017 and ended in April 2018. The retailer used that process to cut debts and slash other costs, but "these efforts simply weren't sufficient to stabilize" the business and deliver profits, the company said Thursday in a court filing. Charming Charlie has debt of about $82 million, comprised of an asset-based credit line, a term loan facility and vendor payment credit line, court papers show.
Total Retail's Take: Another one bites the dust. Charming Charlie is the latest mall-based retailer that has been forced to file for bankruptcy protection as more consumers bypass malls in favor of online shopping. In fact, after emerging from its previous bankruptcy in April 2018, Charming Charlie continued to face challenges "that make it impossible for Charming Charlie to continue as a going concern,” said Alvaro E. Bellon, CFO, Charming Charlie, in court documents, according to Bloomberg. Those included fewer mall visits by customers, landlords that required the retailer to keep some unprofitable stores open, and a lack of capital. The store closures will add to the more than 7,000 stores that have either already closed or are slated to close this year, according to Coresight Research. Coresight is estimating the total store closures for all of 2019 could hit 12,000.
It's sad to see Charming Charlie go. Founded in 2004 by Charlie Chanaratsopon, Charming Charlie sells jewelry, handbags, apparel, gifts and other items, with a particular emphasis on colorful products. The company is unique in that it's known for organizing its merchandise by color, and its core customer base is middle-aged women. Charming Charlie had grown to more than 390 locations in the U.S., Canada, the Middle East and the Philippines by late 2017.