Charlotte Russe Sold
San Diego–headquartered, mall-based retailer Charlotte Russe Holding Inc. announced Aug. 24 that it agreed to be purchased by private-equity firm Advent International Corp. When the sale goes through, Charlotte Russe will become a private company and it will close a tumultuous chapter in the company’s history.
According to a Charlotte Russe statement, an Advent affiliate will formally make a tender offer on the company by Aug. 31. It will offer a cash purchase for all of the outstanding shares of Charlotte Russe common stock at a price of $17.50 per share for a total value of $380 million.
Jennifer Salopek, chairman of Charlotte Russe’s board, said the sale represents a victory for the retailer because the sale shows a premium of 255 percent over Charlotte Russe’s closing share price on Jan. 21, 2009, the day the company was put up for sale.
In the past few months, Charlotte Russe had emerged from a bitter proxy fight for control of the retailer of stylish, inexpensive fashions for women aged 15 to 34. The company was prepared for a showdown election between competing slates for the board of directors during its annual shareholders meeting on April 28.
However, the slate supported by Salopek prevailed on April 16, when the opposing slate withdrew. It happened when two leading independent proxy advisory firms, RiskMetrics Group and Glass Lewis & Co., recommended shareholders support the slate backed by the board of directors.
On the day of the sale, Advent managing partner David Mussafer announced that former Old Navy President Jenny Ming, who he called an Advent operating partner, would work with Charlotte Russe to improve its performance. Retail is an investment focus of Advent, which also had invested in retailer Lululemon Athletica.
The sale was good news for the retail market, according to financial company B. Riley & Associates. The sale proved that after a tough recession, there was money available for the purchase of a retailer, according to an Aug. 25 B. Riley research note.
However, the note questioned future growth prospects of Charlotte Russe, which maintains a large fleet of 501 stores. However, Charlotte Russe Chief Executive John Goodman said the future is bright. “I am confident that this partnership will create opportunities for our employees and positions us well for the future,” he said.—Andrew Asch
