Francesca’s plans to close approximately 140 stores by Jan. 30, 2021, according to a filing with the Securities and Exchange Commission. As a result of the closures, Francesca’s expects to incur total impairment charges of $29 million to $33 million.
The apparel and accessories retailer also is evaluating various alternatives to improve its liquidity and financial position such as further lease concessions and deferrals, further reductions of operating and capital expenditures and raising additional capital. Options for raising capital include seeking a refinancing of the company’s debt, restructuring its debt and liabilities through a private restructuring or a restructuring under the protection of applicable bankruptcy laws.
“If the company is unable to raise sufficient additional capital to continue to fund operations and pay its obligations, the company will likely need to seek a restructuring under the protection of applicable bankruptcy laws,” Francesca’s said in the filing.
In September, Francesca’s had announced plans to investigate strategic alternatives following a 29% drop in net sales during Q2. The retailer is one of a growing roster of apparel brands considering bankruptcy protection due to the effects of the pandemic.