The apparel chain Francesca's is now planning to shut an additional 97 locations which comes after its recent filing for bankruptcy protection, according to court documents, dealing another blow to mall owners.
The Houston-headquartered company, which filed for Chapter 11 last week, had previously said it planned to close about 140 of its 700 stores — roughly half of which are in U.S. shopping malls.
The bankruptcy filing and news of more store closures comes in the midst of the holiday season and follows dozens of other clothing retailers, including J.Crew and Brooks Brothers, seeking reorganization during the coronavirus pandemic. Francesca's had to temporarily close its stores in March, resulting in a 50% drop in first-quarter net sales, which raised doubts about its ability to stay afloat.
Francesca's said it currently has a takeover offer from TerraMar Capital, which is serving as the stalking horse bidder in its sale process. Its existing lender, Tiger Finance, has committed to provide a $25 million bankruptcy loan. Francesca's said it is aiming to complete a sale by late January.
Some of Francesca's top landlords include mall owners Simon Property Group, Brookfield, CBL & Associates and Pennsylvania REIT. The latter two both filed for bankruptcy protection last month, hurt by their retail, restaurant and entertainment tenants either not paying rent or closing their doors for good.
Another wave of retail bankruptcies and store closures is expected to hit in early 2021, after companies work through the holidays and are able to reassess the health of their businesses.