Francesca’s CEO Steve Lawrence has resigned, just as the retailer revealed that it is exploring strategic alternatives, which may include the possible sale of the company or a refinancing.
The women’s apparel and accessories retailer is sharing the same struggles as many mall-based competitors, with the company set to close up to 40 underperforming stores in 2019. In Q3, the retailer reported a 10% decline in net sales, with comparable store sales plummeting 14% on top of an 18% decline in the same period a year ago.
Like Francesca’s, specialty mall-based retailers such as Aeropostale, Claire’s Stores, Nine West, Rue21, Wet Seal and The Limited have all either restructured or declared bankruptcy in the last few years. These retailers shared many of the same core problems, including operating too many stores in the face of declining brick-and-mortar traffic, failing to differentiate product lines and weak e-Commerce offerings.
Francesca’s has not set a timetable for completion of the process, and it does not intend to comment further unless a transaction or other alternative is determined. The company has engaged Rothschild & Co., a French investment bank and financial services company, and other advisors to assist in the process.
The retailer will appoint Michael Prendergast as the interim CEO subject to the finalization of an agreement with Alvarez & Marsal, where he is a Senior Director in its Private Equity Performance Improvement Retail practice.