Francesca’s completes review; to go it alone
Francesca’s has completed its review of strategic alternatives and there are no big changes in store — at least for now.
Early this year, the struggling young women’s apparel and accessories retailer announced a strategic review, whose options included a possible sale. But on Tuesday, the company announced that it had completed the review and believed the interest of its shareholders were best served “at this time” by focusing on the execution of its turnaround plan.
Francesca’s also said it has entered into a new $10 million term loan agreement with Tiger Finance meant to improve liquidity and support its strategic initiatives. The loan matures in August 2022.
“We believe that the additional liquidity provided by the term loan agreement, in combination with previously announced cost savings and operating initiatives, will allow the company additional cushion as it implements its turnaround plan, and represents a vote of confidence in the company’s turnaround efforts,” said Michael Prendergast, who was named interim CEO following the abrupt departure Steve Lawrence in January to pursue “other opportunities.” (In February, Lawrence was named executive VP and chief merchandising officer of Academy Sports + Outdoors.)
In December, on the heels of disappointing third-quarter earnings, Francesca’s said it planned to close up to 40 underperforming stores in 2019. The company, which has struggled amid online competition and fast fashion upstarts, lost $16.2 million during the third quarter that ended Nov. 3, compared with earning a $200,000 profit during the same period last year. Sales fell 10% and same-sales were down 14%.
As of August 13, 2019, Francesca’s operated approximately 718 stores nationwide.
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