The reorganization includes closing stores and increasing e-commerce sales.
Another retailer is heading for bankruptcy court. Women’s accessories boutique chain Francesca’s filed for Chapter 11 on December 3 in Delaware. Like many retail stores, Francesca’s has been impacted by the trickle of traffic through malls and retail centers. The company has partnered up with an equity firm that is planning to purchase the company out of bankruptcy. Despite the challenges, Francesca’s is planning on reorganizing and continuing operations.
Francesca’s started out in 1999 with one small boutique in Houston, Texas. The store sold affordable accessories like jewelry, scarves, and handbags, along with a small collection of clothing. Today, you can find more than 500 Francesca’s boutiques in 45 states. In mid-November, the company announced it would be closing 140 stores by the end of January in a filing with the Securities and Exchange Commission after sales dropped by 29 percent in the second quarter.
Courtesy Francesca's (Facebook)
Francesca’s existing lender has made a deal with an equity firm that will be the stalking horse bidder for the company coming out of bankruptcy. A plan to reorganize includes renegotiating store leases, improving its digital sales, and adding new brands to store offerings. Earlier this year, Francesca’s added a new line for girls called Franki. The pandemic has forced smaller retail businesses to invest in an online presence in order to boost online sales and make up for the loss of foot traffic.
The pandemic of 2020 has forced the bankruptcies and closure of retail chains big and small. The list includes well-known brands like J. Crew, Neiman Marcus, Lord & Taylor, JCPenney, and Pier 1 Imports. Francesca’s stock price has fallen more than 80 percent over the last year. After news of the bankruptcy hit, the stock dipped below $2 a share.