MajorsDec 24, 2024
Nordstrom Family, Partner to Take Retailer Private in $6B DealMembers of the founding family have partnered with Mexican retail company El Puerto de Liverpool to acquire Nordstrom.
FinancialsJun 18, 2020
Francesca’s Weighs Possible Bankruptcy
The COVID-19 pandemic exacerbated existing problems for the clothing and accessories chain, including declining sales and store traffic.
Francesca’s is considering bankruptcy as the COVID-19 pandemic takes a toll on its business. (Image courtesy of Flickr/Phillip Pessar)
Houston—Clothing and accessories chain Francesca's Holding Corp warned a bankruptcy may be in its future in a filing with the U.S. Securities and Exchange Commission Tuesday.
The retailer reiterated its “going concern” warning, an alert to shareholders that it may not be able to meet its financial obligations.
The warning was first issued in May following the closure of its stores and the disruptions to its supply chain amid the COVID-19 pandemic.
Francesca’s warned if it is financially unable to sustain its operations, it “may be required to delay, reduce and/or cease our operations and/or seek bankruptcy protection."
The retailer, like so many others, was hit hard by the pandemic.
In a press release, CEO Andrew Clarke described its recent fourth-quarter results as “disappointing,” posting flat year-over-year net sales of $118.9 million.
Francesca’s said it has been grappling with a decrease in comparable sales, net sales, and gross profit as well as a decline in store traffic and conversion rates.
The temporary closure of its 703 locations from late March to late April, leading to the furloughing of many of its employees, only exacerbated these issues, said the company.
As lockdown orders are lifted state by state, it has begun to reopen its locations but that has brought its own problems.
The stores operate with reduced staffing as part of a phase-in period, but the company noted it could face a shortage of employees willing to work in reopened stores.
The delay in the shipment of merchandise to its stores coupled with a drop in store traffic due to a decline in consumers’ willingness to visit malls and shopping centers, where many of its stores are located, were also listed as concerns.
The retailer’s leases for its stores, corporate headquarters, and distribution facilities are also hanging in the balance.
It stopped lease payments in April and while it intends to resume payments in July, including back rent for the missed months, it may not have the funds.
If the retailer can’t secure rent relief, its leases may be cancelled.
Francesca’s first “going concern” warning last month and its failure to pay rent violated terms of its credit agreements, but the company said lenders have granted it a waiver regarding its rent agreement.
If the retailer can’t regain compliance with the terms of its agreements, it could default on them and be unable to borrow under the credit agreements.
The company is still assessing the overall impact of COVID-19 and told the SEC it needs more time to file its first-quarter results.
“The extent to which the COVID-19 pandemic continues to impact our results will depend on future developments that are highly uncertain and cannot be predicted at this time, including new information that may emerge concerning the severity of the virus and the actions to contain its impact,” said Francesca’s.
Signet Jewelers Ltd. also requested more time to file its quarterly report from the SEC last week for similar reasons.
Francesca’s is expected to file its quarterly report no later than 45 days after June 16.
More on Financials
The Latest
MajorsDec 24, 2024
Boucheron Bets on Las VegasThe brand has opened its second U.S. location in the Fontainebleau resort and casino.
EditorsDec 24, 2024
The Spectrum Jewels I Want to Find Under the Tree Associate Editor Lauren McLemore highlights pieces from the AGTA Spectrum & Cutting Edge Awards she’d be thrilled to unwrap on Christmas.
Brought to you by
A Diamond Is Forever Celebrates "Forever Present" Holiday CampaignA Diamond is Forever hosted a holiday celebration in honor of their new marketing campaign, ‘Forever Present.’
SourcingDec 24, 2024
Gemfields to Temporarily Suspend Emerald MiningThe move is one of several cost-cutting measures outlined by the company as it faces a weaker luxury market and other challenges.
Weekly QuizDec 19, 2024
This Week’s QuizTest your jewelry news knowledge by answering these questions.
IndependentsDec 23, 2024
Philadelphia 76ers’ Tyrese Maxey Stars in The 1916 Company’s New CampaignThe retailer’s “On the Clock” campaign celebrates how time, precision, and purpose come together.
EditorsDec 23, 2024
My Favorite Piece of the Week Jewels of 2024Associate Editor Natalie Francisco chose her 12 favorite Piece of the Week picks from the year gone by.
Brought to you by
De Beers Group Launches Holiday Campaign for Natural Diamonds‘Forever Present’ campaign revives the iconic A Diamond is Forever tagline and celebrates the diamond dream.
GradingDec 23, 2024
GIA Adds Filler Identification to Emerald ReportsLab clients have the option to request this addition on their emerald reports.
Events & AwardsDec 20, 2024
Two Participants Complete Inaugural Ella Klein InternshipJamie Dunton and Gabriella Botelho are the first graduates of the program, created by the WJA Foundation and Julius Klein Diamonds.
CollectionsDec 20, 2024
Piece of the Week: Retrouvaí’s Ring for CharityIn the spirit of giving, Retrouvaí will donate $4,000 from the sale of this ring to the Los Angeles Regional Food Bank.
IndependentsDec 19, 2024
Michigan’s DeVries Jewelers Unveils New Location in Time for the HolidaysCo-owner Dan DeVries shared what it’s like moving into a space triple the size of its old store and how it feels to be a “real jeweler” now.
CollectionsDec 19, 2024
State Property Transforms Spain’s Generalife Gardens into JewelryAlong with the latest “Gardens” collection, the brand has released limited-edition designs offering more indulgent pieces.
CrimeDec 19, 2024
Alleged Jewelry Thieves Attempt Rowboat EscapeThe man and woman are accused of stealing jewelry from a shipping container then trying to flee by paddling a small boat out into a bay.
SourcingDec 19, 2024
The Second-Largest Diamond Ever Found Now Has a Name The 2,488-carat diamond recovered from a mine in Botswana has been dubbed “Motswedi” while its 1,094-carat sibling is “Seriti.”
SourcingDec 19, 2024
Gemfields Reports Record Ruby Auction Results Despite Challenges at SourceThe average price per carat hit a record high for the miner, which said it remains unaffected by the conflict in Mozambique.
AuctionsDec 18, 2024
Alexandrite Ring Sells for Record-Setting $1.9M at Sotheby’sThe nearly 17-carat stone made history for the color-change gem that, according to the auction house, is experiencing a “notable surge” in the market.
WatchesDec 18, 2024
Historic Titanic Pocket Watch Winds Its Way Back to Tiffany & Co. More than a century after survivors gifted a Tiffany timepiece to the captain of the ship that rescued them, the jeweler has reclaimed it.
TechnologyDec 18, 2024
Picchiotti Utilizes AI in ‘Spotlight’ Video CampaignThe videos highlight how pieces from the “Xpandable” and “Reversible Xpandable” collections put the wearer in the spotlight.
IndependentsDec 18, 2024
Industry Veteran Steve Feldman Set to RetireFeldman reflected on 45 years in the jewelry industry and clarified that it’s not a total retirement.
Events & AwardsDec 17, 2024
Chanel to Receive Gem Award for High Jewelry ExcellenceThe luxury brand is being honored for excellence in high jewelry design in its “Haute Joaillerie Sport” collection.
SourcingDec 17, 2024
Frank Circelli, Founder of Gem Shopping Network, Dies at 75Circelli was a pioneer in the world of TV shopping who is remembered for his passion for gemstones and his big personality.
AuctionsDec 17, 2024
Blue Diamond Fetches $8.8M at Christie’sThe nearly 6-carat stone headlined the recent jewelry auction, which also featured Mica Ertegun’s jewelry.
CrimeDec 17, 2024
‘Black Bin Crew’ Robbers Get 14-16 Years in Prison The three men, who got their nickname because they’d toss the jewelry they stole into black plastic bins, were arrested back in August.
TrendsDec 16, 2024
Marion Fasel’s New Book Delves Into the History of Engagement Rings“The History of Diamond Engagement Rings: A True Romance” is a 128-page small-format book containing more than 165 images.
WatchesDec 16, 2024
Take a Look Inside the New Rolex Boutique on Rodeo DriveGearys opened a 6,200-square-foot Rolex store with a design that pays homage to the brand’s connection to the ocean.
GradingDec 16, 2024
GCAL By Sarine Expands 8X to 2 More Fancy Shapes The diamond cut grade is now available for marquise- and pear-shaped diamonds.
