As of Thursday, May 2, 2019
After restructuring its debt by more than 50 percent last year, Charlotte Russe Holding Inc. could be up for sale or headed for bankruptcy restructuring.
According to reports in the Wall Street Journal, the decades-old, San Diego–based retailer is considering a sale or filing for bankruptcy protection. Reportedly, the retailer has hired Guggenheim Securities to explore strategic alternatives.
Charlotte Russe executives did not immediately reply to inquiries about a possible sale or bankruptcy.
Last year, Charlotte Russe reduced its term-loan debt from approximately $214 million to $90 million, which in turn reduced its annual interest expense by nearly half. The loans’ maturity date was extended with term lenders to February 2023, with the lenders receiving 100 percent of Charlotte Russe’s equity.
At the time of the loan reduction, Charlotte Russe operated 532 mostly mall-based stores in 45 states and Puerto Rico. A few years earlier, Charlotte Russe expanded to include Peek Kids, with 11 stores and an e-commerce site.
Over the past several years, Charlotte Russe has seen increased competition from other retailers including Forever 21 and other mall-based stores that target young female customers.
Charlotte Russe has been led by Jenny Ming since she became the chief executive in 2009, taking over from Mark Hoffman, who left after some merchandising missteps and declining same-store sales. She previously had led Old Navy as its president.
Charlotte Russe, named after a French dessert, was founded in 1975 by three brothers—Dan, Frank and Larry Lawrence—who grew up in the retail business in Brooklyn, N.Y. They opened their first store in Carlsbad, Calif. The concept grew slowly over the next 20 years into a 35-store chain and was acquired in 1996 by investment firm Saunders, Karp & Megrue and Bernie Zeichner, who at the time was Charlotte Russe’s chief executive.
The company went public in 1999, trading on the NASDAQ market until the company’s debt was acquired by lenders.