Store closings: Francesca's files for Chapter 11 bankruptcy protection, plans to close 140 stores amid COVID-19
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Women’s boutique chain Francesca's has voluntarily filed for Chapter 11 bankruptcy protection, with plans to sell the business, including its brick-and-mortar stores.
The Houston-based clothing chain is the latest retailer to file for bankruptcy during the news release, Francesca's filed Thursday in U.S. Bankruptcy Court in Delaware, which noted it still plans to close about 140 of its 700 stores previously announced in September.
The company said Thursday that 558 stores remain open, but it "plans to attempt to renegotiate a number of leases during this process, which may include closing additional boutiques."
On Thursday, the company said it was obtaining $25 million in financing from its existing lender, Tiger Finance, to facilitate the sales process, subject to court approval.
Francesca's CEO Andrew Clarke said in the release that the process allows the company to address lease obligations and "seek a new investor that can see Francesca’s into the future."
"The financing provided by Tiger will enable francesca’s to pursue a sale process that will allow us continue to focus on our omni-channel strategies, optimize our boutique fleet, broaden our customer reach with brand extensions and drive sustainable, profitable growth," Clarke said.
The company says it has lined up a "stalking horse" bid, or a first bid in a court-supervised sales process, and has a letter of intent from TerraMar Capital LLC, an investment firm that provides debt and equity capital to middle-market businesses.
“We are confident that we will emerge from this process as a stronger company poised to drive growth by exploring new brand avenues, expanding our ecommerce channels, and providing our customers with the latest fashion options and treasure hunt experiences they know and love us for," Clarke said.
Follow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko