Moody’s gives Charlotte Russe, loan Caa1

Moody's Investors Service said it assigned Charlotte Russe, Inc. a Caa1 corporate family rating and Caa1-PD probability of default rating and a Caa1 rating to its $90 million principal senior secured term loan.

The outlook is stable.

"Charlotte Russe has experienced negative same store sales comps that have accelerated over the last two quarters, largely the result of product missteps and traffic declines, but also resulting from inventory timing issues stemming from the company's February 2018 debt restructuring," Brian Silver, Moody's vice president and lead analyst for the company, said in a news release.

"Although we expect Charlotte Russe to continue to face headwinds in a difficult retail environment, with the debt restructuring now behind them the company will have some tailwinds relative to last year, including a lower interest expense burden, reduced store rent expense resulting from renegotiated leases, and a gradual easing of its tightened vendor terms that are ultimately expected to lead to more healthy inventory replenishment and breakeven to moderately positive free cash flow generation over the next 12-18 months."

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