Charlotte Russe is closing its doors — for good.
The teen retailer filed for Chapter 11 bankruptcy on Feb. 3, “in light of the company’s financial condition,” court documents read. At the time, the company was planning on closing only 94 stores and was looking for a new buyer to help bring it back to life.
“[Charlotte Russe is] facing an immediate liquidity crisis, and without the new financing and the use of cash collateral, [Charlotte Russe] will not have the funds necessary to maintain their assets,” court documents read. “Accordingly, without immediate access to the new financing or cash collateral, [Charlotte Russe” could suffer substantial and irreparable harm. [Charlotte Russe’s] need for access to additional liquidity is, therefore, urgent.”
But a new buyer never materialized.
On Wednesday, a judge signed off on the sale of the retailer’s remaining assets to SB360 Capital Partners LLC in a Delaware bankruptcy court. Liquidation sales at all of the company’s remaining 416 brick-and-mortar locations begin Thursday.
The 44-year-old retailer of women’s apparel and accessories, which includes denim and perfume brand Refuge, as well as plus-size and perfume brands by Charlotte Russe under its umbrella, has been under pressure in the last few years as retail continues to evolve.
The company was acquired in 2009 by private equity firm Advent International, at a time when it was still thriving. In fact, the privately held company had strong growth up until 2014 and was even considering an initial public offering that would allow it to trade on the New York Stock Exchange. Last month, when Charlotte Russe filed for bankruptcy protection, it had more than 500 physical stores.
But sales started to slip.
“Following 15 consecutive quarters of increased sales, however, the [Charlotte Russe’s] performance began to materially deteriorate and plans for the IPO were put on hold,” the court documents read. Sales at Charlotte Russe have plunged by nearly $200 million in the last four years.
The California-based company, which had stores in 48 states and Puerto Rico before filing for bankruptcy, said it was having trouble reaching its core demographic: teenage girls and young adult women in rural and middle America. Declining mall traffic across the country didn’t help either, as shoppers moved online.
Charlotte Russe is just the latest in a string of retailers announcing store closures so far this year, including The Gap, Victoria’s Secret, Abercrombie & Fitch, Chico’s and J.C. Penney. Department store Sears also closed about half of its store fleet during bankruptcy proceedings in the fall.