A fashion retailer with multiple locations in Massachusetts recently decided that it needed to tackle its financial problems in an aggressive fashion. It has therefore filed for Chapter 11 bankruptcy. As part of the bankruptcy process, the retailer — Charlotte Russe — is planning to close around 94 locations and pursue a sale.
The mall chain has apparently been edging closer and closer to bankruptcy for a while now. In fact, it reported that it was negotiating specific debts over a year ago. The problem that the chain has been facing is declining sales over the past few years. The company, which sells clothing to young women and also controls Peek shops, is in 49 states.
If the retailer cannot locate a purchaser by mid-February, it is planning to liquidate completely. The company reported that it has been given a financing package valued at $50 million or less to help the chain to continue its operations. If the chain ends up liquidating, this will no doubt impact the 8,700-plus people working at the company. The financial struggles that Charlotte Russe is facing may not come as a surprise to the public in light of the many mall retail stores that have struggled to generate foot traffic amidst heavy digital competition.
Sometimes changes in a certain sector or in the economy as a whole can cause businesses in Massachusetts and other states to flounder from a monetary standpoint. Fortunately, Chapter 11 bankruptcy has proven to help many companies to bounce back financially. An attorney can help business owners whose liabilities heavily outweigh their assets to complete bankruptcy filings with the goal of getting back on the path to profitability in the long term.