Coverage: Women’s clothing retailer Charlotte Russe to close
Women’s apparel chain Charlotte Russe will close all of its remaining stores as it becomes the latest victim of the retail apocalypse.
Chris Morris of Fortune.com had the news:
The company says the shutdown of 416 locations will occur during the next two months. Going out of business sales will begin immediately in stores across 44 states and Puerto Rico.
Charlotte Russe had hoped to stay in business, filing for Chapter 11 bankruptcylast month and closed 94 locations. However, a liquidation firm called SB360 Capital Partners won the bankruptcy auction for its assets and inventory and decided to close the stores.
The company will accept gift cards through March 21, and all stores will be closed by the end of April.
The move will result in thousands of job losses. Charlotte Russe had 8,700 employees at the time of its bankruptcy filing, the majority of which were part-time workers.
Chris Isidore of CNN Business reported that the retailer tried to stay open:
The company didn’t want to shut down. It filed for bankruptcy protection a month ago and announced plans to close only 94 of its 512 stores nationwide. The goal was to use the bankruptcy process to shed debts and sell to a buyer who would keep it in business.
But those hopes fell apart this week when liquidator SB360 Capital Partners won the auction in bankruptcy court for Charlotte Russe’s $160 million worth of inventory, and other assets. The plan to shut down was approved Wednesday by the bankruptcy court in Delaware.
SB360, which describes itself as “one of the oldest, most experienced companies in the country conducting store closing and going out of business sales,” announced Charlotte Russe would start going out of business sales at all stores as of Thursday. The company will accept gift cards through March 21, and it will close all of its stores by of the end of April.
Charlotte Russe had 8,700 employees at the time of the filing, all but 1,400 of whom were part-time workers. It had stores in every US state except Alaska at the time of its bankruptcy filing. It also owned 10 children’s clothing stores under the Peek brand, which it acquired in 2016.
Kate Gibson of CBS News reported that the company’s leases will be sold separately:
A bankruptcy court on Wednesday approved the sale of the company’s merchandise to the liquidation company. Charlotte Russe’s intellectual property and rights to its leases will be sold separately.
In addition to merchandise currently in stores, additional tops, bottoms, jeans, jackets, dresses, shoes and other accessories originally intended to be sold online will be brought to stores from Charlotte Russe’s distribution center, SB360 said in a news release.
The liquidation sales are expected to wrap up quickly, with gift cards redeemed for two more weeks, or until March 21, 2019.
Founded in 1975 in San Diego, Charlotte Russe was purchased by private equity firm Advent International for $380 million in 2009. The company in 2016 expanded to include Peek Kids, with 10 of the high-end children’s clothing stores continuing to operate in eight states.