LOS ANGELES — San Diego-based teen retailer Charlotte Russe Inc. petitioned a court Sunday to approve its filing for Chapter 11 bankruptcy, as it seeks to sell its assets in an auction.
The retailer’s filing in Delaware bankruptcy court follows more recent chatter about the fate of the teen fashion chain, which Moody’s placed last year on its watch list of retailers at risk of a loan payment default.
In its petition, the company listed assets between $500 million and $1 billion, with liabilities in the range of $100 million to $500 million. Its footprint spans 512 stores throughout the U.S., mostly in malls and outlet and lifestyle centers. The company’s business also includes 10 stores operating under the baby and children’s apparel brand Peek, which the company acquired in 2016.
The company asked the court to approve the start of a store closing plan that would see the closure of 94 doors – ranging from about 3,000 square feet to more than 9,000 square feet – with sales slated to begin Feb. 7 and end March 31.
In September, the company enlisted Berkeley Research Group to begin exploring a possible restructuring.
About two years ago, Charlotte Russe Inc. said it struck a deal with lenders to cut its debt from $214 million to $90 million, while nearly halving the annual interest rate and pushing back the maturity date to 2022. The deal at the time was perceived as a sign of confidence on the part of lenders for the company to be able to right the business.
But its efforts have largely stalled. Moody’s downgraded Charlotte Russe’s credit rating in January, citing underperformance and lack of visibility on its turnaround strategy as well as liquidity concerns.