- Charlotte Russe is back in expansion mode after filing for bankruptcy in February and liquidating in March. An executive with owner YM Inc.'s U.S. subsidiary, A&M LLC, said the teen apparel brand has opened some 135 stores so far. YM Inc., which acquired the retailer's brand and intellectual property in March, initially said in June that it planned to open a total of 100 Charlotte Russe stores.
- The expansion efforts will continue in 2020, the executive said. The holding company has opened roughly 25 Charlotte Russe stores per month since it bought the brand and an additional round of store openings will kick off in February, the executive said. Since YM Inc. acquired the brand, the e-commerce site has relaunched and is performing "very well," the executive said.
- When the teen retailer filed for bankruptcy in February, it cited deteriorating sales and in-store traffic, and a failure to "effectively reposition their e-commerce business and social media engagement strategy," according to court documents. The brand had 512 stores at the time of filing.
Charlotte Russe's story has followed the trajectory of many apparel companies lately, which make up over half of the major retailers that have filed for bankruptcy so far in 2019.
Reports surfaced in January 2019 that Charlotte Russe was considering a potential sale or bankruptcy filing. The reports coincided with a downgrade on the retailer's issuer credit rating and its issue-level rating on its term loan facility by S&P Global. Those reports came to fruition a month later, and Charlotte Russe entered bankruptcy with the same goal that many retailers do: to rationalize its store footprint, get back on trend and improve its e-commerce site.
It is not unusual for a brand to be resurrected after bankruptcy, the same thing happened with Gymboree, which will be relaunched by The Children's Place in early 2020, and Toys R Us, which partnered with retail concept b8ta to open two stores this year for the holidays.
While just over 130 stores is certainly a much smaller footprint than the 512 the brand entered bankruptcy with, it also represents a rapid expansion since June, when the retailer announced just five store openings on a planned total of 100. At the time, Eric Grundy, CEO of YM Inc, said the brand was "a great fit for our growth strategy and our mission to exceed customer expectations by delivering fast fashion at amazing value."
In addition to Charlotte Russe, YM Inc owns a collection of other brands primarily in the teen space, including Sirens, Urban Planet and Stitches.