Charlotte Russe Files for Bankruptcy, Plans to Close 94 Stores
The beloved mall store will soon shut some of its doors
Charlotte Russe, the clothing store beloved by teens and young adults, is the latest mall store to be facing shutdowns.
In a press release, the company announced on Monday that it voluntarily filed for relief under Chapter 11 bankruptcy and plans to close 94 out of it’s 500 store locations, which also includes stores from their kids’ line, Peek Kids.
The company is seeking a sale of the business, but for now, the website and brick and mortar locations will remain open thanks to the $50 million the company received from lenders. News of the upcoming closures will be announced “in the near term.”
According to CNN, Charlotte Russe’s court filing reported that 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.”
It also acknowledged that marketing strategies “failed to connect” with their customer. And that it “shifted too far towards fashion basics” which made them “outpace the rapidly evolving fashion trends.”
It also reported that the company was bought in 2009 by the private equity firm Advent International in a $380 million cash-for-stock deal. In 2018 they agreed to reduce its debut from $214 million to $90 million but Charlotte Russe went from $928 million in 2017 to $795 million in 2018.
This is just the latest in staple mall brands to suffer from poor sales. Other beloved stores to declare bankruptcy within the past few years have been the accessories brand, Claire’s, jeans retailer True Religion, shoe store Payless, women’s apparel line Bebe and kids’ clothing boutique, Gymboree.
The size-inclusive women’s clothing line, Fullbeauty, also just filed for bankruptcy this week. Fullbeauty Brands Inc. filed for Chapter 11 status on Sunday.