Charming Charlie has filed a voluntary Chapter 11 petition for bankruptcy court protection.
The filing was made in a bankruptcy court in Delaware. The retailer, which is known for its concept of merchandising its assortment by color, said Monday it has reached an agreement with the majority of its term loan lenders. The filing was so the company can facilitate a restructuring of its business.
The company — which last month operated more than 375 stores — is in the process of closing underperforming locations. One of those sites is the New York flagship in Manhattan on Fifth Avenue.
Lana Krauter, interim chief executive officer, said, “The actions we are announcing today are intended to help ensure that the company has adequate sources of financing and the right capital structure to support the business on an ongoing basis as we continue to implement our back-to-basics strategy. We are confident that by reducing the size and scale of our business, we can focus on the core strengths that make the company successful.”
The back-to-basics strategy was disclosed on Dec. 1. In addition to closing stores, the company at the time said it would also shutter its Los Angeles office and reduce the headcount in its Houston Corporate Support Center and Distribution Center.
She said charmingcharlie.com and “hundreds of stores across the country” remain open for business.
Krauter also said, “Our goal is to move through this process quickly and emerge as a stronger, more focused organization that is better positioned to succeed in the rapidly changing retail environment.”
The retailer has a $20 million debtor-in-possession financing agreement from a majority of its existing term loan lenders, and it also has secured a $35 million DIP asset-backed loan with current lenders. Both arrangements are still subject to bankruptcy court approval.
The company said it “intends to pay vendors in full for all goods and services provided after the filing.”
The retailer is based in Houston, and sells fashion jewelry, handbags, apparel, gifts and beauty products. Its stores are located across the U.S. and Canada.