Women's fashion retailer Charlotte Russe Holding is being asked to reverse its rejection of a buyout bid for the company by one of its investors.

The retailer sent a letter to bidders KarpReilly Capital Partners and HIG Capital last month to say their unsolicited proposal - which valued the firm at up to $199m - was not in the best interests of its shareholders.

However, Charlotte Russe shareholder Plainview is urging the retailer's board to immediately solicit better proposals from other potential acquirers, or in the absence of such proposals engage KarpReilly and HIG Capital in a constructive dialog regarding its offer.

Charlotte Russe also expressed confidence in its new leadership team at the time of turning down the offer.

However, Plainview believes that Charlotte Russe's board initiated transformation is a risky alternative to accepting the buyout proposal in light of the retail downturn and negative same-store sales/earnings trends, and said Charlotte Russe's new management team "lacks experience in the successful turnaround of a teen/young women's retailer".

The private investment firm said that the consortium proposal represents a 65% to 74% premium to the recent closing price of $5.46 on 12 December. It said the proposal values Charlotte Russe of 20x to 30x 2009E earnings are above the valuation of its competitors and that the apparel industry trades at approximately 12x LTM earnings.

A statement by Plainview said: "As a shareholder, we have been interested in Charlotte Russe due to its strong balance sheet and historical cash flow generation. However, based on the company's negative same store sales and earnings trends, as well as the company's own guidance for the first quarter of fiscal year 2009, we believe the offer to acquire a 100% interest of the equity of Charlotte Russe Holding at a range of between $9.00 and $9.50 per share in cash by a private equity investment consortium (KarpReilly and H.I.G. Capital) represents fair value to shareholders."

"Retailers are experiencing the most challenging environment in decades and this fact should be an additional reason to accept the buyout offer, not an excuse for poor performance," Plainview added.