Another Retailer Closing IL Stores After Bankruptcy Filing

ILLINOIS — Another major retailer has filed for bankruptcy protection. This time it’s Charlotte Russe, a women’s clothing company seen in malls across the country. The company, which is reportedly closing six Illinois locations, announced in a release Monday it voluntarily filed for Chapter 11 bankruptcy protection in a federal bankruptcy court in Delaware.

Charlotte Russe plans to close about 94 stores — roughly 20 percent of its fleet— and hopes to sell its business and assets. A spokeswoman for the company told The Wall Street Journal a going-concern sale is the retailer’s preferred path. The company will provide more details later about plans to close both Charlotte Russe and Peek stores, as well as any closing sales.

These Illinois Charlotte Russe stores are reportedly closing, according to NBC Chicago:

• Joliet, Louis Joliet Mall - 3340 Mall Loop Drive
• Lincolnwood, Lincolnwood Town Center - 3333 W. Touhy Ave.
• Lombard, Yorktown Shopping Center - 203 Yorktown Shopping Center
• Peoria, Northwoods Mall - 2200 W. War Memorial Drive
• Skokie, Old Orchard - 4999 Old Orchard Center
• Algonquin Commons - 1952 S. Randall Road

The company, based in San Francisco, said it has received a commitment of up to $50 million in debtor-in-possession financing. If approved by the court, the money would be used to support the company's operations and administration during bankruptcy proceedings.

According to CNBC, the private equity firm Advent International bought Charlotte Russe in a $380 million deal. But the chain has struggled and had to strike a deal last year to reduce its debt by $124 million. According to The Wall Street Journal, Charlotte Russe saw sales plummet in the third quarter of 2018 by more than $35 million. Adjusted earnings fell by more than $8 million compared to the third quarter of 2017.

“The Debtors suffered from a dramatic decrease in sales and in-store traffic, and their merchandising and marketing strategies failed to connect with their core demographic and outpace the rapidly evolving fashion trends that are fundamental to their success,” Brian Cashman, the company’s chief restructuring officer, said in court filing obtained by the newspaper.

Charlotte Russe has about 500 stores across the U.S. while Peek has about 10 stores and an e-commerce site. The clothing retailers are just the latest dominoes to fall in the industry though, following major closure announcements by Sears and children's clothing retailer Gymboree.

Patch national staffer Dan Hampton contributed to this report.

Photo credit: Shutterstock/Public Domain