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New Top Executives Face Takeover Bid at Charlotte Russe

Women’s retail clothier Charlotte Russe Holding said it received a takeover bid Nov. 12, the same day that it reported a loss for the most recent quarter.

KarpReilly Capital Partners and H.I.G Capital made an offer to acquire its 21 million outstanding shares for $9 to $9.50 a share.

At the low end, the offer would amount to $187.8 million and $198.2 million at the high end. KarpReilly already has a 5.4 percent stake in the San Diego-based company.

Charlotte Russe’s board, which includes a slate of newly appointed company executives, said it would review the proposal.

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“We would note that a fundamental premise of the KarpReilly proposal, that Charlotte Russe has no permanent management team, was addressed in this afternoon’s announcement of a new management team,” said Chairwoman Jennifer Salopek. “The board has also been developing a new strategic plan to address current issues at the company and is confident that the new management team would be well positioned to reinvigorate growth and profitability.”

The company, which has 500 stores in the United States and Puerto Rico, reported a net loss of $6.6 million, or 32 cents a share, for its fourth fiscal quarter ended Sept. 27, despite an 8.6 percent increase in sales to $206.7 million.

That compares with net income of $8.4 million, or 33 cents per share, on sales of $190.3 million in the year ago quarter.

The retailer’s slate of new executives includes John D. Goodman, former president and CEO of Mervyn’s, who was named CEO.

Emilia Fabricant, former president and chief merchandising officer of Babystyle, was tabbed to be president and chief merchandising officer, while Frederick G. Silny, former senior vice president and chief financial officer of Guess Inc., was named executive vice president and chief financial officer.

In after-hours trading on Nov. 12, the company’s stock was trading at $8.06 a share, down 6 cents from a close of $8.15.

, Connie Lewis

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