Charming Charlie closing all 261 stores after filing for bankruptcy for second time
HOUSTON - Fashion and accessory retailer Charming Charlie filed for Chapter 11 bankruptcy for a second time and plans to close its remaining 261 stores.
The Houston-based company had stopped online sales Thursday and was conducting going-out-of-business sales at its stores. Charming Charlie, which has nearly $82 million in debt, expects to close its brick-and-mortar stores by the end of August, according to court documents.
Charming Charlie has locations in 38 states, with approximately 75 stores in Texas, Florida and California alone. The company employs more than 3,300 people, including 856 full-time employees, Chief Financial Officer Alvaro E. Bellon said in a court declaration.
Founded in 2004, Charming Charlie is known for its wide variety of clothing, jewelry, handbags, scarves and more — all arranged by color. The stores are generally located in malls, street-level shops and outlets. Charming Charlie’s core customer base is women aged 35 to 55, Bellon said.
A view of the Charming Charlie booth during the Operation Smile 8th Annual Park City Ski Challenge at The St. Regis Deer Valley on March 23, 2019 in Park City, Utah. (Photo by Kim Raff/Getty Images for Operation Smile)
After previously filing for Chapter 11 bankruptcy beginning in December of 2017, the company restructured and closed approximately 100 stores, the filing states.
“These efforts simply were not sufficient to stabilize the Debtors’ businesses and ensure long-term profitability,” Bellon said.
Charming Charlie had only $6,000 in cash on hand at the time of filing for bankruptcy, according to court documents.
In the filing, the company cited facing “significant headwinds given the continued decline of the brick-and-mortar retail industry.”
It also faced “severe weather events” in the first quarter of 2019 that led to less shoppers in stores, as well as increased tariffs that reduced the company’s “already slim margins,” according to the filing.
Hilco Merchant Resources LLC and SB360 Capital Partners were handling liquidation sales, which were expected to generate about $30 million in revenue, court documents show.
Other retailers have suffered similar fates in the current retail climate. Toys R Us, facing tough competition from Amazon and several billions of dollars of debt, filed for Chapter 11 reorganization in September of 2017 and liquidated its businesses last year. The women’s clothing chain Dressbarn announced in May it was closing all 650 of its stores.
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This story was reported from Los Angeles.