Decline, store closures and bankruptcy
On May 17, 2016, as Francesca's shares began to plunge, CEO Michael Barnes announced that he would be departing from the company. The company also stated that its stock was at its lowest since the company began trading back in 2011.[8] Barnes would be replaced with Steven P. Lawrence as CEO and President.[9]
On January 31, 2019, Francesca's announced that it was exploring strategic options to save itself, including closing down stores and a potential sale. As a result, Steven P. Lawrence announced that he would be retiring after the announcement, and Michael Prendergast would replace him as CEO effective immediately.[10] On June 13, 2019, Francesca's announced that it would be permanently shuttering up to 30 stores as its shares declined by approximately 13%. CEO Michael Prendergast stated that Francesca's was in the early stages of a comeback, and it has plans to sell its current inventory by the end of Q2 2019, and would offer new and improved products later throughout the year.[11]
On February 14, 2020, Michael Prendergast resigned as CEO of Francesca's, and announced that Andrew Clarke would replace him as president and CEO of the company, effective March 9. Clarke also worked as President of Ascena Retail Group.[12] On November 16, 2020, Francesca's announced that it might be forced to file for Chapter 11 bankruptcy, amongst other options to revitalize its finances. Plans call for up to 140 stores to close by the end of January 2021. The company blamed the COVID-19 pandemic as the main cause for its significant financial hit that stopped physical store sales after all of its stores were forced to temporarily close, amongst a steep decline in mall traffic while also trying to boost online sales.[13]
On December 3, 2020, Francesca's declared voluntary Chapter 11 of the United States Bankruptcy Code in the United States District Court for the District of Delaware. The company has plans to sell its assets, including its online business and brick and mortar stores. The company also stated that it gained $25 million in financing from Tiger Finance, which would allow for the company to pursue a sales process that would allow for the company to stay afloat during the bankruptcy procedure while still in the process of liquidating 140 stores by the end of January 2021.[14] On December 7, 2020, Francesca's announced that it would be closing an additional 97 stores, and that its stock would be delisted from the Nasdaq after trading for nearly a decade, effective December 15, 2020.[15][16]
On January 21, 2021, Francesca's won court approval to sell its assets out of bankruptcy to TerraMar Capital and Tiger Capital Management, who would plan on keeping up to 275 stores open and keep the management team and employees intact.[17] On May 6, 2021, Francesca's filed a proposed liquidation plan a couple of months after its sale to TerraMar Capital and Tiger Capital Management. The plan would wind down the business and would sell assets to its creditors and bondholders.[18]
