Another bankrupt retailer is coming back to the mall.
On Monday, just over a month after Charlotte Russe Holdings Corp. said that it would be forced to liquidate all 512 of its stores nationwide, the company announced that it had sold the Charlotte Russe brand and related intellectual property to YM Inc. As a result of the sale, the chain will be coming back with 100 stores across the U.S. as well as e-commerce.
YM is a Toronto-based retail company that operates brands like Urban Planet, Bluenotes and Sirens — all of which, like Charlotte Russe, are mall staples that target an affordable price point. Charlotte Russe filed for Chapter 11 protection in February, first saying that it would close just 94 stores, but it failed to find a buyer that would keep the business afloat and instead sold its inventory and other assets to liquidator SB360 Capital Partners for $59 million in March.
The latest deal gives the holding company another $5 million to reduce its debt in exchange for its remaining intellectual property and real estate lease assets. The brand will continue operation under new ownership, which YM Inc. teased on Twitter with an announcement reading, “New Team. New Selection. New Charlotte Russe.”
Not everyone is thrilled about the comeback, however: Charlotte Russe had 8,700 employees at the time of the bankruptcy filing, and several Twitter users who said they were laid off from the company responded to the post with anger, calling the announcement “heartless” and “a slap in the face to the dedicated employees you cast aside.”
The brand may be under new management, but it is holding on to its name and logo, much like Nine West and Bandolino, which Nine West Holdings Inc. sold to Authentic Brands Group in June 2018. Other bankrupt retail brands that have sold their brands after liquidating stores include Aéropostale, American Apparel, The Limited, Delia’s and Wet Seal.
Charlotte Russe was acquired in 2009 by private equity firm Advent International for $380 million, which saddled the retailer with $175 million of debt that was due in 2014.
In its bankruptcy filing, the company said it “failed to connect” with teens and young adults in recent years and “outpace the rapidly evolving fashion trends.”
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