Houston-based fashion jewelry and accessories chain Charming Charlie announced yesterday that it’s emerged from Chapter 11 with new management, improved financial positioning, and a sustainable capital structure “to support its back-to-basics strategy,” according to a prepared statement (more on that strategy below).
The troubled retailer filed for Chapter 11 in December 2017 intending to restructure the business and emerge from bankruptcy with a solid plan for growth.
The company, which operated close to 400 stores nationwide in mid-2017, closed around 100 stores late last year, bringing its current total store count to 264. The reshuffling of management that ensued included the hiring of new CEO Lana Krauter.
“We’re pleased the creditors were able to come to an agreement that positions Charming Charlie with a new management team, a stronger balance sheet, and an improved retail footprint,” said Christopher Flynn, CEO of THL Credit, which is now the majority equity holder in Charming Charlie, in the same statement. “We are confident in the company’s underlying fundamentals and believe [Krauter’s] deep experience will provide strong leadership as Charming Charlie pursues the growth opportunities we see for the business going forward.”
The retailer announced its back-to-basics strategy Dec. 1, and the plan centers on reducing the company’s footprint significantly to stabilize a business that was in financial free fall.
In addition to closing roughly a quarter of all Charming Charlie stores, the company also closed its Los Angeles office and reduced the head count in its Houston corporate support and distribution centers.
In a Dec. 1 release from the retailer, then-interim CEO Krauter explained, “By reducing the size and scale of our operations, we have the opportunity to stabilize the business. We also will be better equipped to read and react to trends and what our customers want, which had been the hallmark of our success. It’s what we are referring to as our back-to-basics strategy. This was a challenging decision to make, but we know that it is in the best interest of Charming Charlie, our customers, our vendors, and our employees moving forward.”
Top: Inside a Charming Charlie store (courtesy of Charming Charlie)