An accessories and jewelry retailer in another state called Charming Charlie recently decided that its financial situation required taking aggressive action. The company’s Chapter 11 bankruptcy comes as the women’s store continues to face a competitive business environment in retail. The company recently said it had already entered an agreement with its shareholders and lenders that provides restructuring support. Companies in Massachusetts that are having difficulty making ends meet can likewise take advantage of Chapter 11 bankruptcy protection.
Through the company’s agreement, Charming Charlie is striving to change the company’s capital structure. In addition, it plans to close a portion of its nearly 375 stores. The company CEO reported that her goal was to complete the bankruptcy process rapidly and become a more focused and stronger organization.
The company’s lenders agreed to give it new financing totaling around $20 million, along with an asset-backed loan totaling approximately $35 million. This extra funding should allow the company to achieve its monetary obligations as it proceeds through bankruptcy. The company asserted that it has liabilities and assets ranging between $100 million and $500 million. The business’s quick expansion apparently contributed to its financial struggles in its specialty retail industry.
With many consumers going online to shop or going to discount stores to buy products, retailers with many stores across the United States, including some here in Massachusetts, are generally struggling. Fortunately, companies whose owners are finding their liabilities surpassing their assets may benefit from Chapter 11 bankruptcy filings. Through a bankruptcy filing, a company can reorganize its debt and establish itself on a healthier financial path so that it can continue to thrive in the years ahead.
Source: chron.com, “Houston-based Charming Charlie files for bankruptcy protection,” Katherine Blunt, Dec. 12, 2017