CollectionsApr 26, 2024
Piece of the Week: Jacquie Aiche’s Starry Galaxy NecklaceThe necklace is featured in the brand’s “Rebel Heart” campaign starring Adam Levine and Behati Prinsloo.
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.
Editors' Picks
Sponsored by
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
Events & AwardsApr 26, 2024
AGS Conclave and GIA Symposium Are ConvergingThe two organizations will host a joint event, “Converge,” in September 2025.
SourcingApr 26, 2024
Anglo American Reportedly Shopping De Beers as BHP Eyes Anglo Big changes appear to be on the horizon for the diamond miner and its parent company, Anglo American.
Brought to you by
The Blueprint for Success in Scalable, Personalized Jewelry RetailWith Ho Brothers, you can unlock your brand's true potential and offer customers the personalized jewelry experiences they desire.
Events & AwardsApr 25, 2024
Alexis Padis Takes Over as AGS Board President Padis succeeds Lisa Bridge, marking the first time the organization has had two women board presidents in a row.
Weekly QuizApr 26, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
EditorsApr 25, 2024
5 Tips for Creating Fans from the Top (Savannah) Banana Jesse Cole, founder of Fans First Entertainment, shared the “five Es” of building a fan base during his AGS Conclave keynote.
WatchesApr 25, 2024
Audemars Piguet and John Mayer Partner on Limited Edition WatchThe Royal Oak Perpetual Calendar "John Mayer" was celebrated at a star-studded party in LA last week.
Brought to you by
How Jewelers of America Represents Your BusinessFor over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.
SourcingApr 25, 2024
De Beers Lowers Production Guidance for 2024The announcement came as the company reported a 23 percent drop in production in Q1.
MajorsApr 25, 2024
Detroit Lions’ QB Jared Goff Keeps Going to JaredThe three-time Pro Bowler continues to partner with the retailer, donating to a Detroit nonprofit and giving watches to fans.
CrimeApr 24, 2024
Jewelry Crime Declines Significantly, But Dollar Losses Remain High A double-digit drop in the number of in-store crimes was offset by a jump in off-premises attacks, JSA’s 2023 crime report shows.
CollectionsApr 24, 2024
Pippa Small Announces ‘Venus’ CollectionInspired by the Roman goddess of love, the designer looked to the sea for her new collection.
Events & AwardsApr 24, 2024
JCK Industry Fund Announces 2024 Grant RecipientsThe selected nine organizations have outlined their plans for the funds.
SourcingApr 24, 2024
Rio Tinto’s Q1 Production Drops Amid Pause to Honor Lost Colleagues The mining company’s Diavik Diamond Mine lost four employees in a plane crash in January.
WatchesApr 24, 2024
These Are Rolex’s New Watches for 2024 The crown introduced a dozen timepieces in Geneva, including a heavy metal version of its deep-sea divers’ watch.
ColumnistsApr 23, 2024
The Smart Lab: Advanced Email Marketing Strategies for Mother’s DayEmmanuel Raheb recommends digging into demographic data, customizing your store’s communications, and retargeting ahead of May 12.
IndependentsApr 23, 2024
Hannoush Jewelers Opens New Store in New York Located in the town of Queensbury, it features a dedicated bridal section and a Gabriel & Co. store-in-store.
SourcingApr 23, 2024
Lucapa Sells 3 Diamonds for $10.5M in First Lulo Tender of 2024A 203-carat diamond from the alluvial mine in Angola achieved the highest price.
GradingApr 23, 2024
GIA Has a New Book About William RuserRuser was known for his figural jewelry with freshwater pearls and for his celebrity clientele.
CollectionsApr 22, 2024
Jacquie Aiche’s New Campaign Stars Adam Levine, Behati PrinslooThe “Rebel Heart” campaign embodies rebellion, romance, and sensuality, the brand said.
EditorsApr 22, 2024
The 22 Best Quotes from AGS Conclave 2024 Editor-in-Chief Michelle Graff shares the standout moments from the education sessions she attended in Austin last week.
SourcingApr 22, 2024
Virtual Diamond Boutique Rebrands as ‘VDB’The overhaul includes a new logo and enhanced digital marketplace.
MajorsApr 22, 2024
Signet Raises Nearly $9M for St. Jude Children’s Research HospitalThe money will go toward supporting ongoing research and aftercare programs for childhood cancer survivors.
CollectionsApr 19, 2024
Piece of the Week: Retrouvaí’s Treasure NecklaceA new addition to the “Heirloom” collection, this one-of-a-kind piece features 32 custom-cut gemstones.
CrimeApr 19, 2024
Grand Jury to Hear Case Against Jeweler Charged in Fatal Shove Following IJO ShowLast month in Dallas, David Walton pushed another jeweler, David Ettinger, who later died.
MajorsApr 19, 2024
Unique Designs Acquires China PearlThe move will allow the manufacturing company to offer a more “diverse and comprehensive” range of products.
GradingApr 19, 2024
AGS Ideal Report Now Available in Printed FormFrom now through mid-May, GIA will be offering the reports at a 50 percent discount.
