Charlotte Russe Closes Milestone Transaction with Lenders

Fashion Retailer Restructures Term Debt and Obtains Significant Rent Concessions Through Out-of-Court Restructuring

Significant Deleveraging, Cost Savings, Improved Free Cash Flow, and Maturity Extension Combine to Position Company For Renewed Momentum and Growth

SAN FRANCISCO--()--Charlotte Russe (the “Company”) is pleased to announce that it has closed a restructuring agreement (the “Agreement”), with holders of 100% of its Term Loan debt (the “Term Lenders”), that will reduce the Company’s Term Loan debt from approximately $214 million to $90 million, reduce annual interest expense by nearly half, and extend maturity to February 2023. In exchange, the Term Lenders will receive 100% of the equity of Charlotte Russe, subject to dilution from a management equity incentive plan.

Jenny Ming, Chief Executive Officer of Charlotte Russe, said: “This marks an important milestone in Charlotte Russe’s history and we are pleased with the collaborative efforts from all stakeholders that were needed to make this happen. We have accomplished our goals of right-sizing our capital structure and operating expenses, and look forward to executing against our long term vision and strategy. We are excited to work together with our new owners and Board on the next chapter for Charlotte Russe.”

Recognizing the benefits of an out-of-court process to the Company, its stakeholders, and employees, the Company and the Term Lenders negotiated the framework of a consensual restructuring in late Fall. The restructuring was subject to the Company meeting several conditions set forth in a restructuring support agreement. Most notably, the Company was required to obtain a threshold amount of annualized operational savings, including rent relief, and the commitment of 100% of the Term Lenders to participate in the out-of-court restructuring. The significant annualized operational savings, including rent relief, achieved during this process will allow for the reinvestment needed to grow the business and improve profitability.

Cooley LLP and Moelis & Company LLC served as the Company’s legal and financial advisors. The Term Lenders were advised by Milbank, Tweed, Hadley & McCloy LLP and Berkeley Research Group, LLC.

About Charlotte Russe, Inc.

Charlotte Russe is a fashion brand for young women, offering affordable on-trend apparel, shoes and accessories for all sizes, with a fun and engaging shopping experience wherever and whenever she wants. The Company operates 532 Charlotte Russe stores throughout 45 states and Puerto Rico with an ever-growing digital presence. In 2016, the Company expanded to include Peek Kids, operating 11 stores and an ecommerce site. For more information, please visit http://www.CharlotteRusse.com and on Instagram @CharlotteRusse and @Peekkids.

Cautionary Note Regarding Forward-Looking Statements

Except for the historical information contained herein, this press release contains forward-looking statements. Such statements include, but are not limited to, statements about Charlotte Russe’s beliefs, plans, objectives, goals, expectations, estimates and intentions that are subject to significant risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. The words “may,” “could,” should,” “would,” “believe,” anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “goal,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from any results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risk that a condition to the closing of the transaction will not be satisfied, other risks to consummation of the transaction, including the risk that the transaction will not be consummated within the expected time period, general and regional economic conditions, industry trends, consumer demands and preferences, competition from other retailers and uncertainties generally associated with women's apparel and accessory retailing. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contacts

Media
Sard Verbinnen & Co
Meghan Gavigan / Megan Bouchier
415-618-8750
CharlotteRusse-SVC@sardverb.com
or
Legal
Cooley LLP
Seth Van Aalten
212-479-6104
svanaalten@cooley.com

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