The jewelry and accessories retailer has filed for Chapter 11 bankruptcy — the second time in less than two years — with plans to close all of its 261 stores. Going-out-of-business sales are already underway in many locations, with all stores expected to close no later than Aug. 31. Charming Charlie’s website is no longer taking orders.
In its court filing, the company said it faced "unsustainable operating expenses, including onerous leases" at a time when many physical retailers are challenged by online retailers. The retailer, which has $82 million in debt, reported having about $6,000 in cash on hand. It expects liquidation sales to garner about $30 million in revenue. Hilco Merchant Resources and SB360 Capital partners are handling the liquidation.
Houston-based Charming Charlie previously filed for bankruptcy protection in December 2017, and subsequently closed about 100 stores. It emerged in April 2018 with new owners. Under the company’s reorganization plan, lenders took over most ownership in the company, with the majority equity holder being THL Credit.
In its most recent bankruptcy filing, Charming Charlie said that its previous effort at restructuring its operations and debt "were simply not sufficient to stabilize the debtors' businesses and ensure long-term profitability."
Second Avenue Capital and White Oak Commercial Finance is providing $13 million in debtor-in-possession financing to fund the chain's operations through bankruptcy.
Founded in 2004, Charming Charlie sells a wide assortment of jewelry, handbags, apparel, gifts and beauty products, with the merchandise organized by color. Similar to many other retailers, Charming Charlie has suffered from sluggish mall traffic and rising digital sales.