Francesca will close 140 stores, may file for bankruptcy

A pedestrian walks by a Francesca store in New York.

Scott Milne | Cnbc

Francesca said on Monday that it would permanently close about 140 stores by the end of January, but also warned that more significant steps might have to be taken to stabilize its finances – including filing for bankruptcy.

The apparel and accessories retailer is “evaluating various options to improve its liquidity and financial condition,” such as cutting operating expenses, raising capital, refinancing its debt or leasing through concessions and defaults Negotiating ways to reduce spending, according to a filing by the US Securities and Exchange Commission.

Francesca said in the filing, “If the company is unable to raise sufficient additional capital to continue operations and pay its obligations, the company will likely require restructuring under the protection of applicable bankruptcy laws.”

The retailer said it expected to recover a total loss fee of $ 29 million to $ 33 million due to the store closing.

Francesca is among retailers who have been pushed to the brink by the coronavirus epidemic, as it is in a state of temporary store closures and struggles with declining shopping mall traffic, trying to manage changes in online sales Has been doing. A growing number of retailers have filed for bankruptcy protection, including Jessie Penney, Neiman Marcus, and Brooks Brothers.

Some of those retailers, such as Penny, have managed to find a buyer who can keep the stores open. Others, such as Stein Mart, had to liquidate their stores and shutter the business altogether.

Francesca shares, which have a market value of $ 7.2 million, have fallen 85% over the previous year. The stock fell more than 35% to nearly $ 2.36 in Monday trading.


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