Francesca’s has completed a strategic review of the company and will continue its turnaround efforts rather than pursue a sale. The retailer also has entered a $110 million loan credit agreement with Tiger Finance to assist with the growth plan.
“We are pleased to have closed the term loan agreement as it provides additional financial flexibility to our organization as we continue to advance our strategic initiatives,” said Michael Prendergast, Interim CEO at Francesca’s in a statement. “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.”
Francesca’s started exploring the potential for a sale following the resignation of former CEO Steve Lawrence in February, which was followed by the departure of EVP and CFO Kelly Dilts in July. The retailer’s net sales and same-store sales both declined by 13% in Q1 2019, but Francesca’s is seeking to partner with landlords to reduce rents, seek early lease terminations for underperforming stores and offer early renewals on locations that have been performing well.
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