Charlotte Russe considers sale or bankruptcy
today Jan 8, 2019
Teen mall retailer Charlotte Russe Inc. is reportedly considering sale or bankruptcy. The development, sourced from people familiar with the matter and reported by the Wall Street Journal, comes just over a year after the retailer was bailed out of a potential bankruptcy filing as the result of a debt restructuring agreement announced in December of 2017.
Working with its lenders and with the help of an upgrade by financial services company Standard & Poor (S&P), the retailer cut its total debt from $214 million to $90 million in February of 2018.
Following the upgrade, S&P said in a report that Charlotte Russe would continue to face a “difficult operating environment."
Charlotte Russe has sought out the help of Guggenheim Securities to "explore strategic alternatives," and the company is considering selling to another retailer or entering into a partnership to avoid bankruptcy, the source said.
The news comes just after the close of 2018, a year marked by the bankruptcies of companies like Sears, Bon-Ton and David's Bridal, with Sears securing a multi-million dollar loan to keep its business afloat.
According to economists, the future of retailers like Charlotte Russe are likely to reveal themselves within the first quarter of 2019, when the aftermath of the holiday season and the outlook for the new year is most clear.
Charlotte Russe is currently owned by Advent International.
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