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Charlotte Russe: Are They Closing for Good?

Charlotte Russe closing the stores

If you’re at all interested in fashion or have ever bought clothes in your life, then you’ve heard of Charlotte Russe. You’ve also likely heard that they are liquidating and closing all of their stores. This will take place over the next two months so if you’re looking for deals, you should probably hurry.

But why are they closing? Nearly every time we’ve stopped into a Charlotte Russe, they’ve been seemingly busy. At least, our stores are always filled with customers. Like most businesses that fail, there are a number of contributing factors and we will address them all. We will discuss what the media is reporting regarding the store’s closure as well as rumors floating around from those who have shopped there.

Either way with Toys ‘R Us gone, Charlotte Russe and Payless now closing their doors, we can’t help but wonder who’s next. Is the start of the online shopping revolution where malls and brick and mortar stores become a thing of the past? Or was it just the unfortunate hand that these companies were dealt?

What is Charlotte Russe?

about Charlotte Russe

For those who aren’t in the know, Charlotte Russe is an American based clothing retail store. It was founded in 1975 with its headquarters based in San Francisco, California. At the time of this article, there are currently 512 locations but at one point, they had as many as 560 in all states excluding Alaska. Many of these stores only recently closed because of the store’s decline.

The store markets itself to teens and young women in their twenties. It’s similar to Forever 21 and Rue21. While there are certainly a few “stand alone” stores, most of Charlotte Russe’s storefronts are located in malls and shopping strip centers. The bulk of which are in the mall. In addition to their stores, Charlotte Russe also offered a number of products for sale through their website. However, the online aspect of their store has recently been shut down.

Charlotte Russe sells a variety of products including purses, shoes, jewelry, sunglasses, accessories, clothing, formal dresses, and even some decorations. Their products are all reasonably priced and you can expect to typically pay well under $20 for an item.

What kind of deals can I expect?

Charlotte Russe deals

Obviously, the longer you wait and the closer it gets to time for the stores to permanently close, the better the deals. Currently, the store is offering 30-50% off their items. From what we understand, the 50% off was on shirts while the accessories were around 30% off. When we visited the stores in person, we also noticed that their clearance area did not include these discounts so if you’re looking to double up on deals, you’ll have to wait. We also asked if they had more options in the back and they did, but it too was limited. The bulk of their inventory was on the floor.

We expect prices to continue to drop and we will likely see 75% off everything and more a few weeks before the store closes. However, the selections will be very slim. When we visited the store shortly after it announced that it was running some “stellar deals”, we didn’t see much of a selection. They were the same tired fashions from a year ago with very little having changed. They were also out of a number of sizes and styles, but that’s to be expected with a company that’s closing. Can’t order to inventory if you’re going to be locking your doors soon.

Keep in mind though that we haven’t been since the store officially announced its closing, which is today, and each store is different; so the sales that we’ve seen might not be the same as the ones you’ll see at yours.

Charlotte Russe has already shut down its online store and customers will have to go to the store itself if they want to pick up any last minute items. Which for those of us who enjoy shopping from our laptop or phone at home, this is a bit of a bummer.

However, there is a bit of light at the end of the tunnel: they will continue accepting gift cards through March 21. While they won’t accept them to the very end of April, you’ll still have a few weeks to spend any birthday or Christmas gift cards you received for the store. And yes, you can still get the discounts with your gift cards and yes, they are worth full value.

Why are they closing?

Charlotte Russe closing

Why the stores are closing depends on who you ask. If you ask your friends or customers of Charlotte Russe, they’ll tell you it’s because the item quality isn’t up to par. If you ask the retail giants, they’ll shrug their shoulders and say it’s an unfair world or that online shipping has pushed them out of the niche. As far as news media outlets go, the story is one of bankruptcy and bad luck.

Keep in mind that Charlotte Russe didn’t want to shut its doors or push out loyal fans but the retail giant had no choice. When they filed for bankruptcy protection around a month ago, they planned to close 94 of their 512 stores. They also intended to keep their online store going and rely heavily on their web sales. They also had planned to use the bankruptcy as a way to get rid of debts and to hopefully entice a buyer who would take over the business and keep it running.

However, on March 7th the store confirmed that they would be closing all of their locations. They originally intended to hold out hopes of someone buying their business, but liquidator SB360 Capital Partners unfortunately won the store’s auction in the court’s bankruptcy department. The liquidators won $160 million worth of inventory and assets.

Why the stores are closing according to the public

Charlotte Russe bankrupt

Another contributing factor to their demise is one that many news outlets aren’t covering and is currently being whispered from girlfriend to girlfriend: their products were notoriously cheap. Many buyers suggest that their clothing and accessories fell apart quickly. “Given the price, I expect the stuff to be a little cheap but my Wish items have held up better than my Charlotte Russe purchases” some have said. Less than positive reviews on many of the retailer’s products also didn’t help it stay in business.

And since Charlotte Russe has to compete with not only online retailers but stores like H&M, Rue21, and Forever 21 (all of which are major giants in the teen/young woman fashion industry), they simply can’t hold their own. Plus as mentioned earlier, Russe purchases don’t tend to hold up so why pay $20 at Charlotte Russe for a shirt that’ll wear out in a year when you could purchase one from Forever 21 for the same price that’ll last much, much longer?

Another contributing factor to their demise is that Charlotte Russe doesn’t have a very large selection; especially compared to Forever 21. Their brick and mortar stores are always much smaller than their competitors and they have limited options/color palates. The brand typically runs 4-5 colors at a given time so if you’re interested in one of those colors, you’ll definitely find something that suits your needs. However, if they’re currently not covering the color you want, you’ll have to head elsewhere.

People have criticized Charlotte Russe in the past for their lack of inclusion; the company says it caters to women of all sizes, but for many women nothing fits. “I’m not overweight but any stretch of the imagination, but their sizes don’t fit me. I’m too tall and too ‘fat’ for their all-inclusive brand,” said one tired customer. Other women have chimed in with similar experiences.

In short, there are a lot of reasons behind the store’s failure.

What about the employees?

Charlotte Russe employee

Charlotte Russe had over 8,700 employees distributed amount their 560 stores throughout 45 of the states. All of the employees, save 1,400, were part time worker. This is to say that they worked under 30 hours a week for the store. As far as their pay is concerned, we aren’t sure entirely but we imagine it’s close to minimum wage. All of these employees will soon be without a job at the end of April.

When the company was going through the bankruptcy process, the court awarded nearly $560 million in bonuses to what they considered to be “key executives”. This was to keep them in place during the store’s closing process.

Unfortunately for the 8,700 other employees, they likely won’t even see a severance pay or any type of bonus. This is because the United States rarely offers out severance pay in bankruptcy cases. The employees could certainly go to court and fight for it, but the cost to hire a lawyer and go through the legal troubles would likely cost more than they would win.

So unfortunately for these employees, once the door closes that’s it; and they’ve only been given a very short window to find a new job to replace this one with.

Why are so many of these stores struggling?

Charlotte Russe store struggling

With companies like Amazon and many websites catering to online shoppers, many brick and mortar retail stores are struggling. Even giants like Wal-Mart and JC Penney are feeling the pressure. Many have begun moving a lot of their merchandise to online while other companies have completely shut their doors and now operate online only.

In several studies conducted, people prefer shopping online to shopping in person. While the old argument for visiting stores in person was to actually see the clothes up close and personal and see how they look/fit your body, the shopping trends have changed. People lead busy lives and for those who work strange hours, getting to the mall wasn’t always an option. Plus, some websites will even let you try the clothes on before you buy them in the case of Amazon.

Even those that make you  buy the clothes outright will allow you to return them within a set of time for a full refund. Many of the websites will even pay for the return shipping should you be unhappy with your purchase. Plus, there tends to be better deals/pricing online. Also, there are almost always reviews on the products you’re looking to purchase. This means that you can get someone’s honest opinion (sorry retail workers, we know you have to say that those jeans that look awful on us actually look good) on the item you want to buy. You’ll also be privy to whether or not the item held up.

So why change out of your pajamas and leave the comfort of your own home when you kick back and relax with Netflix in the background while you shop to your heart’s content?

Are they really closing for good?

Charlotte Russe going out of business

With so many brick and mortars moving online as well as the fact that Toys ‘R Us was resurrected from the dead after closing, some might be holding out hope that fashion giant Charlotte Russe is either moving online or coming back for a resurrection. Neither is true unfortunately. Charlotte Russe has made it explicitly clear that it’s shutting down completely

However, someone could take the brand and do with it like Dolls Kill did with ancient 90s catalog giant Delia’s and even those that started pumping out the Lisa Frank brand again. In this sense, they would let the brand “rest” for a period of time before rebooting it under their own name. IE: Dolls Kills presents Delia’s. But currently, this isn’t in the works so don’t get your hopes up; the store is very much closing and there are currently no plans to revive the brand in the future.  

So unfortunately the end of April will be the last time we can visit the retail giant in Charlotte Russe before it’s nothing but a memory.

Your thoughts?

We’d like to know what you think about the store closing. Are you at surprised or did you see this coming from a mile away? We also want to know whether or not you have shopped at Charlotte Russe and if you have, what did you buy? What were your experiences with your purchase? Was it as cheap as everyone leads on or were you happy with it? What did you think of their selection and size inclusion? Leave your thoughts in the comment section. We’d love to pick your brain a bit!

I have several years of experience in marketing and startups, and regularly contribute to a number of online platforms related to technology, marketing and small business. I closely follow how Big Data, Internet of Things, Cloud and other rising technologies grew to shape our everyday lives. If you want to contact me for any help email me at dealpursue at gmail dot com. [dealpursue@gmail.com]

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