- After liquidating its brick-and-mortar business in bankruptcy earlier this year, Charlotte Russe is back with five stores opening this week, according to a press release.
- YM Inc., the fashion house and retailer that purchased Charlotte Russe's brand property out of Chapter 11 in March, said it plans to ultimately open 100 Charlotte Russe locations. (The apparel retailer had more than 500 when it filed for bankruptcy this year.)
- Housing the new Charlotte Russe stores are malls in Michigan, Georgia, New Jersey and Pennsylvania. YM also relaunched there retailer's e-commerce store this week.
Liquidation doesn't have to be the end of a retailer. Very often buyers are ready to pick up the intellectual property of a failed store chain and capitalize on what brand loyalty it has left in the world.
It's easier, after all, to buy a brand on the cheap at a bankruptcy auction than to build one out of scratch, which can take years, or decades, not to mention plenty of capital and effort. Often salvaged brand names end up on a product or an online store. Brand clearinghouses like Authentic Brands Group and Bluestar Alliance do this for a living, and they've bought up some iconic brands that went into bankruptcy, like Nine West and Brookstone.
And every now and then a buyer comes along that thinks the brand still has some life left in the physical world.
After buying the Bon-Ton Stores IP out of bankruptcy for $900,000, the tech company CSC Generation planned to open dozens of new department stores after Bon-Ton collapsed last year. As another example, Toys R Us has made a comeback after liquidating in 2017. It relaunched this year under the company name Tru Kids Inc., run by the dead retailer's former merchandising chief.
Plenty of observers are skeptical about whether failed retailers can make a comeback after bankruptcy. But often retailers collapse because of their debt load, over-expanded footprint or managerial neglect, or some combination of those things. A clean slate for a brand with some remaining cache can be an alluring proposition if the new owner thinks they can bring something new. In the case of Bon-Ton, CSC's founder, Justin Yoshimura told Retail Dive last year he thought his company's data and tech-savvy could make Bon-Ton's stores and e-commerce site more profitable.
For its part, Charlotte Russe's new owner already operates more than 560 stores across the continent under multiple brands, including Urban Planet, Stitches and Suzy. YM CEO Eric Grundy in a statement pointed to Charlotte Russe's "affordable on-trend fashions" and said the brand is "a great fit for our growth strategy and our mission to exceed customer expectations by delivering fast fashion at amazing value."