- Charming Charlie's intellectual property assets are going up for sale on Sept. 11 as the women's apparel and accessories retailer winds down its store operations in bankruptcy.
- Hilco Streambank (part of Hilco Global) is handling the marketing for the auction and soliciting interest for the assets, which include trademarks, domain names, social media assets and customer databases.
- The bid deadline for the assets is Sept. 5. Any sale of the IP is subject to approval by the federal bankruptcy court in Delaware handling Charming Charlie's Chapter 11 case.
Charming Charlie is joining the ever-expanding list of retailers to find life after physical liquidation.
The afterlife of dead retailers can take many forms. The brand can be attached to product lines, or survive as an online-only outfit. In some cases, once the IP goes to a new owner, the brand can have a second life as a brick-and-mortar retailer as well. Fairly recent to join that class are FAO Schwarz, Bon-Ton, Charlotte Russe and Toys R Us.
The first step in any process is acquiring the IP. For investors, retailers, brand holding companies and other buyers, acquiring a retail brand out of bankruptcy presents a relative bargain compared to the many years and millions of dollars it might cost to build a brand out of scratch.
Often among the most valuable assets in the portfolio are customer databases. In Charming Charlie's case, that includes information from its nearly 7 million loyalty members, 6.8 million opt-in email addresses and 3 million physical addresses from marketing mailers, as well as 254,000 Instagram followers, 33,000 twitter followers and 1.3 million Facebook likes, according to a Hilco webpage about the auction. In its last year, Charming Charlie generated nearly $250 million in sales, according to Hilco.
Hilco Streambank CEO Gabe Fried said in a statement that a buyer "has an opportunity to capture the brand's sales by growing the brand's e-commerce business and/or developing a curated retail portfolio to connect with the customer, as well as building upon the brand's highly successful loyalty program."
Its second Chapter 11 in less than two years marks the end of Charming Charlie's current incarnation, which was founded 15 years ago and grew to 400 stores at its height. The retailer made its name largely by its approach to merchandising, grouping products together by color. That merchandising scheme required a sophisticated inventory system and often left it with excess products in underperforming colors, according to the company's CFO.
Also hurting the company was a litany of common retail woes: expensive leases, overexpansion, declining mall traffic, tariffs, severe weather events, employee attrition and plenty of problems of the retailer's own making as well.