Apparel retailer Francesca’s plans to close 140 of its 700 store locations by January 30, 2021, the company disclosed in a filing with the Securities and Exchange Commission.
The company has been mired in the economic challenges arising from the COVID-19 pandemic and has been “unable to raise sufficient additional capital to continue to fund operations and pay its obligations.”
Francesca’s decision to close its stores came after the company said it was evaluating other alternatives to improve its liquidity and financial position. According to Retail Dive, this included renegotiating its leases, cutting costs, debt refinancing, and restructuring its debt and liabilities in or out of bankruptcy.
The company even reshuffled its board and executive leadership in hopes of turning around its business. While the company’s moves were expected to pay off, it was forced to shutter its stores as most malls across the country went into lockdown at the start of the pandemic in March this year, resulting in financial and supply chain challenges for the retailer.
“[M]any of our boutiques are located in shopping malls and other retail centers that benefit from the ability of ‘anchor’ retail tenants, generally large department centers, and other attractions, to generate sufficient levels of consumer traffic in the vicinity of our boutiques,” Francesca’s noted in its filing. “We, along with numerous other retailers, including anchor retail tenants, have announced the closure of a significant number of stores, mainly in mall and anchor store locations.”
In May, the retailer issued a warning in its public filings after an audit raised concerns over its ability to remain solvent over the next 12 months. While the revelation violated Facensca’s asset-based loan agreement, the retailer reportedly managed to get a waiver from its lending partner.