Whew chile, things aren’t looking too good for stores that were once mall staples.
Like #CharlotteRusse for example, which filed for #Chapter11Bankruptcy today. Company officials announced plans to close 94 stores, according to @CNN.
Charlotte Russe is the latest mall-based retailer to file for bankruptcy protection, joining a list that includes #Gymboree, #Claires and #MattressFirm. In a court filing today, Charlotte Russe, which operates 500 stores in malls around the country, said it “suffered from a dramatic decrease in sales and in-store traffic” and struggled with “the burden of maintaining a large brick-and-mortar presence.”
Hoping to not go the way of stores such as #LimitedToo and #WetSeal (RIP), Charlotte Russe plans to emerge from bankruptcy with a new owner and a lighter balance sheet.
Officials secured $50 million from lenders to continue running about 400 Charlotte Russe and Peek Children’s stores, as well as its website, during the bankruptcy.
So why is Charlotte Russe in this position? Officials attribute the bankruptcy to poor sales and too much debt.
In 2009, private equity firm Advent International bought Charlotte Russe in a $380 million cash-for-stock deal. Last year, Charlotte Russe reached a deal to reduce its debt from $214 million to $90 million but despite the deal, Charlotte Russe’s sales plunged from $928 million in 2017 to $795 million in 2018.
The company said its marketing strategies “failed to connect” with teens and young adults and “outpace the rapidly evolving fashion trends.” Charlotte Russe also “shifted too far towards fashion basics” and away from trendy clothes, which the company said prevented it from growing its online business.
In an effort to turn things around, the company, plans to save money by closing stores, go back to its “on-trend, fast-fashion model,” and develop more content for online and social media to engage core shoppers.
#Roommates, are you checking for a Charlotte Russe comeback? Let us know!
TSR STAFF: Christina C! @cdelafresh