Francesca’s Holdings has filed for Chapter 11 bankruptcy in Delaware. The company intends to use the proceedings to implement a sale process. It operates a nationwide chain of boutique stores.
The company has its head office in NW Houston. It was formed in 2007 and went public in July 2011. Prior to filing, its current market capitalization was $8 million. The company has borrowings and term loans of $12 million. In its most recent quarter, sales were $76 million, down 29% year-on-year and it recorded an operating loss of $12.7 million.
At the end of January 2020, it had 711 stores in 47 states. It currently has 558 stores open.
The company has obtained $25 million debtor-in-possession financing facility from its existing lender, Tiger Finance. The company has entered into a Letter of Intent with TerraMar Capital, an investment firm, for TerraMar to become the stalking horse bidder for the auction and sale process. The LOI contemplates the purchase of the company as a going concern.
FTI Consulting has been retained as financial advisors to the company and will manage the sale and auction process. The target date for the sale completion is January 20, 2021.