Last December, Charming Charlie filed for Chapter 11 bankruptcy protection. The reason given was to reduce the number of corporate employees and to close many stores that were considered “underperforming.”
As of April 24, the jewelry and accessories company has emerged from bankruptcy and reports that it was successful in its plan for financial restructuring.
The chain retailer suffered from dwindling mall traffic and increasing competitors’ internet sales. About 100 stores have been shuttered, which the chief financial officer (CFO) said when the bankruptcy was filed was also due to too broad of a vendor base and miscalculations in merchandising.
The chief executive officer (CEO), who just joined Charming Charlie last fall, said, “Today marks a fresh start for Charming Charlie as we emerge as a stronger, more focused organization that is better positioned to serve customers in our 264 stores across the country.”
The company’s reorganization plan saw lenders taking equity in the company, with the largest equity holder being THL Credit. The CEO of THL Credit said, “We are pleased the creditors were able to come to an agreement that positions Charming Charlie with a new management team, a stronger balance sheet and an improved retail footprint.”
When a business is having financial difficulties, Chapter 11 bankruptcy allows them to restructure their finances in order to try to become profitable again. Debts to creditors are paid over time, which can give the company the breathing room needed to survive financially. Chapter 11 bankruptcy for business provides companies with a chance to emerge from bankruptcy stronger and more stable than before.
Source: chainstoreage.com, “Charming Charlie emerges from bankruptcy with a smaller footprint, new owners,” Marianne Wilson, April 25, 2018