Charlotte Russe filed for bankruptcy on Feb. 3 and it was announced that the company will be closing down at least 94 stores that it owns. The fashion retailer suffered from a substantial decline in product sales and in-store traffic resulting in low returns. With fewer profits, the company also grapples to maintain its brick-and-mortar presence thus in the end, it was only left with the option of bankruptcy declaration to save part of the business.
In a press release that was issued on Monday, Feb. 4, it was stated that the online stores of Charlotte Russe and Peek will remain open to continue serving its customers. Part of the official statement reads: "Charlotte Russe Holdings Corporation together with its subsidiaries today announced that the Company has voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware on February 3, 2019."
Also, "The company intends to use these proceedings to enable an orderly wind-down of a group of approximately 94 of its store locations while continuing to pursue a going-concern sale of the business and assets."
In its filing, Charlotte Russe hopes to spring back from bankruptcy by selling the company. It also received a $50 million bankruptcy financing package from lenders so it can continue operating its other 400 stores. Furthermore, in case there is no buyer yet by Feb. 17, it is planning to totally liquidate its assets.
Charlotte Russe has over 500 retail stores located in malls and standalone outlets across the U.S. and Puerto Rico. Now, as it closes many of its shops, it will continue operating via the Charlotte Russe and Peek Kids stores that specialize in infants and children's fashion. As mentioned, its online-based shops will remain open until further notice.
ABC13 News reported that Charlotte Russe is the latest retailer company to file for bankruptcy protection. It now joins the long list of bankrupt firms that include Claire's, Sear's, Gymboree and Mattress Firm.
Charlotte Russe is a retail store that mainly retails women's clothing. It was launched in 1975 and has always been a mainstay in major malls across the United States. The brand's popularity among young women skyrocketed in the 1990s but it began to struggle after online shopping was introduced.
Charlotte Russe eventually incurred debts and this prompted the firm to secure assistance to pay them off. In 2009, Advent International took over its ownership and paid $380 million for the purchase. Finally, it appears that the fashion chain did not fully recover from debts and it sunk deeper until the bankruptcy was filed this week.
