francesca's Files for Chapter 11 Bankruptcy Protection
Women’s boutique chain francesca's filed for Chapter 11 bankruptcy protection last week, with plans to sell the business, including its brick-and-mortar stores. In a statement announcing the bankruptcy filing, francesa's said it was obtaining $25 million in financing from its existing lender, Tiger Finance, to facilitate the retail stores sales process, subject to court approval.
Houston-based francesca's previously announced plans to close 140 boutiques, and plans to renegotiate several leases during this process, which may include closing additional boutiques. As of today, 558 stores remain open for business. francesca’s also said it currently has a takeover offer from TerraMar Capital, an investment firm that provides debt and equity capital to middle-market businesses, which is serving as the stalking horse bidder in its sale process. francesca’s said it's aiming to complete a sale by late January.
Total Retail's Take: francesca's bankruptcy filing comes in the middle of the 2020 holiday season, but the struggling retail chain had run out of options. The clothing chain is the latest retailer to file for bankruptcy during the coronavirus pandemic, joining Guitar Center, New York & Company, J.C. Penney, Stein Mart, Sur La Table, Ascena Retail Group, Tuesday Morning, and others. Another wave of retail bankruptcies and store closures is expected to hit in early 2021, after companies work through the holidays and are able to reassess the health of their businesses.
