After filing for Chapter 11 bankruptcy only one month ago and announcing 94 store closures, Charlotte Russe revealed that it will close all of its approximately 500+ stores, including namesake brand locations and 10 Peek Kids stores. Liquidation sales at the stores begin March 7 and run through April 30.
Charlotte Russe had hoped to find a buyer to rescue the business, but was unable to secure an offer ahead of a deadline set by lenders.
In bankruptcy court, Judge Laurie Selber Silverstein approved the retailer’s request to sell its inventory and assets to SB360 Capital Partners LLC, a liquidator affiliated with the Schottenstein family of companies that owns multiple retail brands include American Eagle Outfitters and DSW.
The transaction does not include Charlotte Russe’s intellectual property (IP), meaning the brand could come back in some form in the future.
“We are partnering with the buyer and remain in talks to sell the IP, are optimistic about the future of the brand, and remain in ongoing negotiations with a buyer who has expressed interest in a continued brick-and-mortar presence to continue to serve our loyal customers in the future,” said a Charlotte Russe spokeswoman after the hearing.
The retailer received a commitment for a debtor-in-possession (DIP) loan of $50 million upon filing Chapter 11.
Charlotte Russe shared struggles similar to those of many mall-based apparel retailers, with slowing foot traffic compounded by poor merchandise selection, lack of integration between stores and e-Commerce and a subpar online experiences in general. To make matters worse, the company still had as much as $90 million in debt stemming from its $380 million acquisition by private equity firm Advent International.