Francesca will shut 140 shops and probably file for chapter
A pedestrian walks past a Francesca store in New York.
Scott Mlyn | CNBC
Francesca said Monday it will permanently close about 140 stores by the end of January, but also warned that it may need to take bigger steps to stabilize its finances – including filing for bankruptcy.
The apparel and accessories retailer is currently exploring “various alternatives to improve its liquidity and financial position,” For example, lower operating costs, raise capital, refinance debt, or negotiate ways to reduce lease costs through concessions and deferrals. Securities and Exchange Commission.
“If the company is unable to raise sufficient additional capital to continue financing operations and meeting its obligations, the company will likely have to seek restructuring under the protection of bankruptcy laws,” Francesca said on the file.
The retailer expects a total of $ 29 million to $ 33 million in impairment losses due to the store closure.
Francesca’s is one of those retailers marginalized by the coronavirus pandemic as they weathered temporary store closings and struggled with a decline in malls’ traffic while trying to manage the switch to online sales. A growing number of retailers have filed for bankruptcy protection, including JC Penney, Neiman Marcus and Brooks Brothers.
Some of these retailers, like Penney’s, have managed to find a buyer who can keep the stores open. Others, like Stein Mart, have had to liquidate their stores and close the business entirely.
Francesca’s stock, valued at $ 7.2 million, is down 85% over the past year. The stock fell more than 35% on Monday to around $ 2.36.