Charlotte Russe on Friday announced that it has sold its flagship as well as its Peek Kids brands to different entities. Both transactions were for undisclosed amounts.
The apparel retailer and its subsidiaries sold the Charlotte Russe brand and related intellectual property to North American fashion company YM Inc., according to a Charlotte Russe press release.
The corporation sold the Peek Kids brand and related intellectual property to women’s and children’s apparel manufacturer and marketer Mamiye Brothers, according to another release. The last nine Peek Kids stores will close in "the coming weeks," and, beginning in July, Mamiye plans to embark on a growth plan predicated on digital direct-to-consumer sales and wholesale, the company said.
Although the Charlotte Russe and its Peek Kids brands each have a new lease on life, these transactions, which amount to the sell-off of the brands' intellectual property, are unlikely to salvage any actual leases. Last month, the company got the thumbs up from a bankruptcy judge to completely liquidate and shutter its hundreds of stores.
YM CEO Eric Grundy said that the brand will contribute to YM's growth ambitions in the fast-fashion and discount apparel space. Mamiye CEO Chuck Mamiye, meanwhile, said that he "has long admired the Peek brand, its unique design aesthetic and exceptional relationship with its consumers ... [and] we look forward to continuing its legacy and staying true to its loyal followers."
Charlotte Russe is yet another retailer faltering under private equity ownership amid seismic changes in retail, having gone private in 2009 in a $380 million buyout by Advent International. At the time, the company operated more than 500 stores in 48 states. In 2016, about when the company acquired Peek Kids, Fitch listed the company's debt on its "Bonds of Concern" list, and Retail Dive flagged it as a retailer that could go bankrupt in 2017. The company is one of 15% of retailers acquired by a private equity firm over the past 15 years to file for Chapter 11, according to a Retail Dive analysis.