Francesca’s to Close Stores, May File for Bankruptcy
Add Francesca’s to the list of retailers struggling amid the coronavirus pandemic.
The women’s apparel, accessories and footwear retailer revealed plans Monday to close about 140 stores by Jan. 30. Francesca’s Holdings Corp., parent company to Francesca’s, is also exploring ways to optimize its business — and hasn’t ruled out bankruptcy as an option.
“There can be no assurance that the company will be able improve its financial position and liquidity, complete a refinancing, raise additional capital or successfully restructure its indebtedness and liabilities,” the company wrote in a Securities and Exchange Commission filing Monday. “If the company is unable to raise sufficient additional capital to continue to fund operations and pay its obligations, the company will likely need to seek a restructuring under the protection of applicable bankruptcy laws. The company’s strategic plans are not yet finalized and are subject to numerous uncertainties, including negotiations with creditors and investors and conditions in the credit and capital markets.”
The news comes after months of losses. The Houston-based firm lost $17.2 million in the most recent quarter, compared with earnings of $1.8 million a year earlier. Meanwhile, shares of Francesca’s Holdings Corp., which were trading down more than 33 percent during Monday’s trading session, are down nearly 83 percent year-over-year.
In September, Francesca’s, which has about 700 stores across 47 states, hired FTI Capital Advisors to pursue “available strategic alternatives.” The specialty retailer is now anticipating impairment charges in the range of $29 million to $33 million for the store closures.
Francesca’s is just one of many firms to reveal store closures in recent years. Since the start of the pandemic, several big retailers — including J. Crew, Neiman Marcus, J.C. Penney and Tailored Brands — have filed for Chapter 11 bankruptcy protection, with most of them now out of bankruptcy under new ownership.
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