Women’s specialty chain Charlotte Russe Holdings Corp. has voluntarily filed a Chapter 11 petition for bankruptcy court protection.

The filing was made on Sunday in a Delaware bankruptcy court. Six other affiliates of the company also filed their own Chapter 11 petitions. The company said it will use the process to conduct an orderly wind-down of 94 stores. At the same time, the retailer will try to find a going-concern buyer for the business. If it can’t find a buyer, the retailer will switch course and liquidate.

The retailer operates 512 brick-and-mortar stores across the country and in Puerto Rico, located mostly in malls and outlet centers. In addition to its core Charlotte Russe nameplate, it also operates 10 Peek Kids stores. The Charlotte Russe and Peek stores, as well as the online platforms, are currently open.

The stores that are set to close won’t begin going-out-of-business sales yet. The company first needs to get court approval of its $50 million debtor-in-possession financing facility to finance the retailer’s operations and the administration of its bankruptcy, and then it will file for court approval of a liquidator to do the GOB sales at the stores slated to be shuttered.

The Chapter 11 petition listed estimated assets and liabilities each at between $100 million and $500 million. The top two unsecured creditors holding trade claims were FedEx ERS at $2.9 million and Google at $2.3 million. The others on the list of top 30 unsecured claims holders were mostly represented by private-label vendors and suppliers.

Brian M. Cashman, chief restructuring officer and managing director of Berkeley Research Group, filed a statement with the court that said the chain is fast-fashion-focused, working on the guiding principle of “Trend + Speed + Value” to provide the latest styles at affordable prices. He said the Peek brand was acquired in 2016, offering apparel for babies, boys and girls from infants up to 12 years of age.

The restructuring officer said the company owed $22.8 million under a pre-petition loan agreement, as well as $10.8 million in letters of credit connected to a pre-petition asset-based loan.

The company has been in operation for more than 40 years, catering to young women’s fashion and accessories, the sector that used to be known as the juniors category in apparel. In 2009, it was acquired by private equity firm Advent International through a $380 million tender offer.

Cashman said the Charlotte Russe business historically experienced strong growth, with net sales growing to $984 million in 2014 from $776.8 million in 2011. Because of the growth momentum, the company in 2013 began preparations for an initial public offering. The IPO was put on hold after the chain’s performance began to deteriorate. Annual volume began falling, hitting $928 million in 2017 and then even lower to $795.5 in 2018. He said the company in December 2016 began exploring strategic alternatives and met with seven potential financial sponsors, but none of those discussions resulted in a transaction. The company completed an out-of-court restructuring in February 2018 to de-lever its balance sheet, but sales continued to decline.

The restructuring officer said the company has initiated several strategies to stabilize the business, including a shift back to an on-trend, fast-fashion model, from mostly basics, improving customer engagement through the development of relevant, real-time content and a rationalization of its store fleet.

The company in December hired Guggenheim Securities as its investment banker to explore strategic options, including the sale of the company. So far, it has 17 potential buyers who have signed confidentiality agreements, although no one has yet submitted any proposal to buy the company. Cashman said the company will continue to solicit stalking-horse bids. Such bidders set the baseline for pricing in a bankruptcy court’s auction of the debtor’s assets. While the retailer has submitted bidding procedures for the planned auction, Cashman said that if no one is selected as the stalking horse by Feb. 17, then the company will switch course and liquidate.

Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.