Charming Charlie Reaches Agreement with Majority of Term Loan Lenders On Terms of Comprehensive Financial and Operational Restructuring

HOUSTON, Dec. 11, 2017 /PRNewswire/ -- Charming Charlie (the "Company") today announced that in continuation of its efforts to stabilize its business, the Company has entered into a Restructuring Support Agreement ("RSA") with a majority of its Term Loan Lenders and Equity Sponsors. The RSA provides for a comprehensive financial and operational restructuring that will significantly reduce the Company's funded debt amounts and cash debt service, establish a sustainable capital structure, and enable Charming Charlie to move forward with its previously announced Back-to-Basics strategy.

To facilitate the restructuring, the Company and its subsidiaries have filed voluntary petitions under Chapter 11 in the United States Bankruptcy Court for the District of Delaware. Charming Charlie expects to operate the majority of its stores and its website as usual during the court-supervised process. Subject to Court approval, the Company also intends to move forward with its previously announced plans to close underperforming locations and simplify its business operations.

"During this holiday season, CharmingCharlie.com and hundreds of our stores across the country are open for business and serving customers," said Lana Krauter, Interim Chief Executive Officer of Charming Charlie. "The actions we are announcing today are intended to help ensure that the Company has adequate sources of financing and the right capital structure to support the business on an ongoing basis as we continue to implement our Back-to-Basics Strategy. We are confident that by reducing the size and scale of our business, we can focus on the core strengths that make the Company successful."

Krauter continued, "We thank our vendors for their ongoing support through the holiday season. We also thank our team members for their hard work and dedication in serving our loyal customers. Our goal is to move through this process quickly and emerge as a stronger, more focused organization that is better positioned to succeed in the rapidly changing retail environment."

The Company has secured commitments for $20 million in new-money debtor-in-possession ("DIP") financing from a majority of its existing Term Loan Lenders. The Company has also entered into a $35 million DIP Asset Backed Loan ("ABL") with its current lenders.  Both financing arrangements, which are subject to court approval, are intended to ensure Charming Charlie is able to continue meeting its financial obligations throughout the Chapter 11 case. Charming Charlie is committed to working with its vendors to help ensure that inventory levels are maintained and products continue to be delivered to customers in a timely fashion. Charming Charlie intends to pay vendors in full for all goods and services provided after the filing.

In conjunction with the Chapter 11 process, the Company has filed a number of customary motions with the Court seeking authorization to support its operations during the restructuring process and ensure a smooth transition into Chapter 11 without disruption, including authority to continue payment of employee wages and health and welfare benefits, and to honor customer programs.

Additional information can be accessed by visiting the Company's restructuring website at http://www.charmingcharlie.com/restructuring-information. Court filings and other documents related to the court-supervised process in the U.S. are available on a separate website administered by the Company's claims agent at http://www.omnimgt.com/charmingcharlie. Information is also available by calling 1-844-452-2141 (toll-free in the U.S.) or 1-818-906-8300 (for parties outside the U.S.) or by sending an email to [email protected].

Kirkland & Ellis LLP is serving as the Company's legal counsel, AlixPartners LLP is serving as its restructuring advisor, and Guggenheim Securities, LLC is serving as its investment banker.

About Charming Charlie
Charming Charlie is a Houston-based specialty retailer focused on fashion jewelry, handbags, apparel, gifts and beauty products. Charming Charlie brings value to their customers by providing them with high quality, style, affordable price points, a broad assortment of product, and stores merchandised by color rather than category. The Company currently operates more than 375 stores in the United States and Canada, and can be found online at www.CharmingCharlie.com.

Charming Charlie Contacts
Michael Freitag or Trevor Gibbons
Joele Frank, Wilkinson Brimmer Katcher
1-212-355-4449

SOURCE Charming Charlie

Related Links

http://www.CharmingCharlie.com