Jewelry and accessories retailer Charming Charlie filed for Chapter 11 bankruptcy Thursday with plans to close all of its 261 stores in 38 states.
The filing marks the company’s second Chapter 11 case, qualifying as what restructuring industry professionals call a “Chapter 22” bankruptcy.
Charming Charlie closed about 100 stores during its previous bankruptcy, which ended in April 2018. The retailer used that process to cut debts and slash other costs, but “these efforts simply were not sufficient to stabilize” the business and deliver profits, the company said Thursday in a court filing.
The company said it faced “unsustainable operating expenses, including onerous leases” at a time when many brick-and-mortar stores are battling with online retailers.
More than 7,000 store closings are already in the works or completed so far in 2019 across the retail sector, according to Coresight Research.
Going-out-of-business sales have already begun at Charming Charlie. The company expects to vacate its stores by Aug. 31, according to a court filing. Hilco Merchant Resources and SB360 Capital partners are handling the liquidation.
Similar trends have affected competitors such as mall chain Claire’s, which filed for Chapter 11 bankruptcy protection in 2018.
Founded in 2004 by Charles Chanaratsopon, Charming Charlie sells jewelry, handbags, apparel, gifts and other items – with a particular emphasis on colorful products. The company had grown to more than 390 locations in the U.S., Canada, the Middle East and the Philippines by late 2017.
Texas, Florida and California together have about 75 Charming Charlie stores.
The company considered women ages 35 to 55 to be its “core customer base,” chief financial officer Alvaro Bellon said in a court filing.
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