Charlotte Russe Bankruptcy: A Revival Plan

Charlotte Russe Bankruptcy: A Revival Plan
Case Code: BSTR602
Case Length: 9 Pages
Period: 2017 - 2019
Pub Date: 2020
Teaching Note: Available
Price: Rs.250
Organization: Charlotte Russe Holding Inc.
Industry: Textiles & Apparel
Countries: United States
Themes: Bankruptcy & Turnaround Management, Macroeconomic Environment
Charlotte Russe Bankruptcy: A Revival Plan
Abstract Case Intro 1 Case Intro 2 Excerpts


On February 3, 2019, San Diego-based specialty apparel retailer Charlotte Russe Holding Inc. (Charlotte Russe) filed for Chapter 11 bankruptcy protection. Charlotte Russe, which was purchased by private equity company Advent International back in 2009, continued to face an uphill battle even after the acquisition while it tried to shed its debt. The retailer was struggling with maintaining a brick-and-mortar presence, with sales steadily declining over the four years 2014-2017 due to in-store traffic slowdowns. The fall in sales was attributed to the company's business strategies, which did not resonate with young female shoppers – the company’s target audience. Its marketing strategies failed to stay ahead of fashion trends and styles, analysts said. The company was floundering as debt mounted in what had become an increasingly difficult climate for mall-based retailers. In early 2018, the company tried to restructure its debt without going into bankruptcy, but it failed. Too much debt and poor sales hurt the retailer. The company, which operated 500 stores in malls across the US, announced that it was suffering "from a dramatic decrease in sales and in-store traffic" and was struggling with “the burden of maintaining a large brick-and-mortar presence." ..

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