Charlotte Russe to Close Approximately 94 Stores in Voluntary Chapter 11 Bankruptcy Plan
Charlotte Russe Holdings Corporation filed a voluntary Chapter 11 bankruptcy petition in United States Bankruptcy Court for the District of Delaware. The announcement of the Feb. 3 filing was made today, as the San Diego-based retailer planned to close 94 of its bricks-and-mortar locations, while pursuing a going-concern sale of the business and assets.
With Charlotte Russe and Peek Kids stores and online platforms still open, the retailers will continue to serve customers.
Charlotte Russe received a $50 million commitment for a debtor in possession financing, which—if approved—will support operations and administration during Chapter 11 proceedings. In customary motions filed with the U.S. Bankruptcy Court, Charlotte Russe has sought authorization to operate in the ordinary course during Chapter 11 proceedings, which will include—without limitation—the authority to continue payment of employee wages and benefits, amounts due to shippers and warehousemen, utility-service providers and taxing authorities. It has also requested the court's authorization to honor certain customer programs.
In 2018, Charlotte Russe reduced $214 million in term-loan debt to $90 million, with the loans' maturity date extended with term lenders to February 2023. Lenders received 100 percent of the company's equity.
Cooley LLP is named as the company's legal counsel, Berkeley Research Group is acting as its financial advisor and Guggenheim Securities, LLC, is serving as its investment banker.
Led by Chief Executive Jenny Ming since 2009, Charlotte Russe was founded in 1975 by brothers Dan, Frank and Larry Lawrence, brothers who opened their first store Carlsbad, Calif.