Dear Charlotte, Take Two

The board of directors of San Diego retailer Charlotte Russe Holding Inc. received a second letter recently urging the board to accept a recent bid from a private equity investment consortium. Financial-services company B. Riley & Co. LLC, a Charlotte Russe shareholder, requested the board explain its decision to turn down an offer from KarpReilly and H.I.G. Capital to purchase the company’s stock for between $9 and $9.50 per share in cash. Further, B. Riley & Co. questioned the retail chain’s management changes and recent business strategies, including one to introduce higher-priced “aspirational” apparel into the merchandise assortment at Charlotte Russe. “We believe that embarking on a new, higher price-point strategy at a time when consumers are growing increasingly frugal is illogical and devoid of economic sense,” said B. Riley’s Bryant Riley in the letter.