Can retail be rescued? Why so many U.S. stores are closing
Charming Charlie, a seller of colorful women’s clothing, jewelry and accessories, says it will go out of business after filing for bankruptcy for the second time in less than two years.
The Houston-based company plans to close all 261 stores nationwide, including one at The Village at Meridian and another in Twin Falls. A total of 3,342 employees will lose their jobs.
In a court filing, Alvaro Bellon, the company’s chief financial officer, said liquidation sales are expected to last two months and raise $30 million.
A manager at the Meridian store said the going-out-of-business sale has begun but said she could not speak about the closing date or the number of employees who would lose their jobs.
Bellon blamed “unsustainable operating expenses, including onerous leases,” for Charming Charlie’s downfall. As of last week, he said the company had $6,000 cash on hand while listing debts of $81.8 million.
Charming Charlie CFO Alvaro Bellon
Charming Charlie’s core customers were women ages 35 to 55 who shopped at the stores an average of three times a year. It emphasized the sale of complete outfits, including fashion accessories, jewelry and handbags. That, Bellon said, required offering a wide assortment of tops, dresses and other apparel pieces in regular and plus-sizes among 26 color varieties.
“Although this approach initially provided Charming Charlie with a strategic benefit and engendered significant brand loyalty, it eventually caused Charming Charlie to be saddled with excess merchandise in underperforming color offerings,” Bellon wrote.
Hilco Merchant Resources and SB360 Capital partners are handling the liquidation. They promise discounts of 20% to 50% off original prices.
But great bargains are not likely to be found, since the companies earn a percentage of sales and also have a duty to take in as much money as possible to carve away at Charming Charlie’s nearly $82 million in debt.
Charming Charlie opened at The Village at Meridian in 2013 and in Twin Falls in 2017.
It’s among several local retailers to close their doors this year. Sears, Shopko, Payless Shoesource, Charlotte Russe, Gymboree and Crazy8 have all closed. Dress Barn has announced it will close its 650 stores, including one in Boise.