The young women’s clothing chain, Charlotte Russe, filed for Chapter 11 bankruptcy and plans to close 94 stores. It’s the latest mall-based retailer to file for bankruptcy amongst others, such as Claire’s and Mattress Firm.
Their 500 worldwide stores “suffered from a dramatic decrease in sales and in-store traffic” and struggle with “the burden of maintaining a large brick-and-mortar presence.” The company hopes to bring in a new owner and secured $50 million from lenders to continue running about 400 Charlotte Russe and Peek Children’s stores.
In 2009, private equity firm Advent International bought Charlotte Russe in a $380 million cash-for-stock deal. Since then, poor sales and debt have rattled the company. Last year, Charlotte Russe reached a deal to reduce debt from $214 million to $90 million. Despite this, their sales dropped from $928 million in 2017 to $795 million. Store sales fell 11.7% during the third quarter of 2018.
The company hopes to save money by closing stores, utilizing an “on-trend, fast-fashion model”, and develop a wider online social media presence.
Image Source: Today Show