After Bankruptcy Filing, Charlotte Russe Is Closing All Stores
After a 44-year run, young-women’s clothier Charlotte Russe is going out of business with a liquidation sale starting March 7 at all its stores.
The San Diego-based retailer filed for Chapter 11 bankruptcy protection on Feb. 3. Later it put out the word it was seeking a prospective buyer to make a bid by March 3 to save it from closing down and liquidating its merchandise. The March 3 deadline came and went but no one stepped forward. An auction to start the liquidation process began on March 5.
Two days later, SB360 Capital Partners was named by a U.S. Bankruptcy Court judge as the agent to handle the retail chain’s liquidation.
Charlotte Russe’s site was taken down with a notice that there would be no further online sales. A statement from SB360 Capital Partners said that Charlotte Russe has $160 million worth of inventory to liquidate at the retailer’s current fleet of 416 stores around 44 states and Puerto Rico. The rights to the company’s leases and its intellectual property will be sold separately.
Charlotte Russe had already started laying off employees. In early February, it filed a notice with the California Employment Development Department that it plans to lay off 87 employees in Ontario, Calif., where it has a warehouse, 85 employees in San Diego and 161 employees in San Francisco. All the layoffs are effective on April 5.
Charlotte Russe was started in 1975 by brothers Dan, Frank and Larry Lawrence in Carlsbad, Calif. It was named after a French dessert.
Since 2009, Charlotte Russe has been led by Jenny Ming, the chief executive who took over from Mark Hoffman, who left after some merchandising missteps and declining same-store sales. Ming previously had led Old Navy as its president.
While the retailers became a player in the juniors-fashion game, Charlotte Russe lost its relevancy in the e-commerce and social media age, said Frances Harder, author of the book “Fashion for Profit.” She also runs a retail consultancy with the same name.
“People are not shopping at malls anymore. They are buying online. It’s not just Charlotte Russe, but all of the bricks-and-mortar stores that are in trouble,” Harder said.
In particular, the juniors market is part of a vanguard that looks for new ways of shopping and finding fashion outside of a mall, Harder said.