This Popular Clothing Chain Just Announced It's Closing 100 More Stores
The news comes days after this mall staple filed for Chapter 11 bankruptcy protection.
As coronavirus cases continue to soar and governors start issuing lockdown and stay-at-home orders, things are looking bleak for American retailers. The past few months have seen stores suffer, crippled by the ongoing pandemic. The latest one to get into difficulties? Clothing and accessories chain Francesca’s. The once booming tween and young adult fashion company just announced the closure of 97 stores, mere days after filing for Chapter 11 bankruptcy protection. Read on to learn more about the future of Francesca's and for another bankruptcy filing that hurts, check out This Legendary Store Just Announced It's Filing for Bankruptcy.
The news comes a few weeks after Francesca's announced on Nov. 16 that it was closing 140 of its 700 stores by the end of Jan. 2021. Then on Dec. 3, the company filed for Chapter 11 bankruptcy protection, and now, the apparel chain says it's planning to shutter an additional 97 locations, according to court documents obtained by CNBC. Roughly half of the announced closures are in U.S. shopping malls, which are deeply suffering due to footfall being ground to a halt.
Even before the pandemic started, however, Francesca’s had faced tough conditions. In Jan. 2019, CEO Steve Lawrence resigned amid a review of the company’s financial options, with outside assessors being bought in to evaluate Francesca’s options. Reports at the time detailed how the company had been hit by younger shoppers migrating to online retailers and independent boutiques. Over the course of 2019, sales dropped 14 percent. And on Sept. 15, 2020, Francesca's announced in a statement that its second quarter sales had fallen by 29 percent.
Utpal Dholakia, a marketing professor at Rice University, told the Houston Chronicle that Francesca's has been struggling due to a failure to pinpoint its key market. “Francesca’s merchandise is highly undifferentiated,” Dholakia said. “You can buy their merchandise in Target and elsewhere. They’re confused about where their brand is, and consumers don’t know why they should go there.”
An existing lender, Tiger Finance LLC, has agreed to put up $25 million in financing, which would ensure “the timely payment of employee wages and benefits, continued provision of customer orders and shipments, and payment of other obligations during the Chapter 11 cases.” That's at least some comfort for Francesca's staff members, who are now facing an uncertain future.
“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 e-commerce channels, and providing our customers with the latest fashion options and treasure hunt experiences they know and love us for,” Francesca's CEO Andrew Clarke said in a statement.
Read on for other stores shutting down stores, and for more on the current state of retail, check out why This Popular Clothing Brand Is Closing 100 Stores.
Read the original article on Best Life.
Abercrombie & Fitch
Though the closures were planned before COVID hit, Abercrombie & Fitch is shutting down seven of its biggest flagship stores around the world by early 2021. The stores shutting their doors are in Dusseldorf, Germany; London, England; Munich, Germany; Paris, France; Brussels, Belgium; Madrid, Spain; and Fukuoka, Japan.
However, Abercrombie & Fitch CEO Fran Horowitz said in a statement to Columbus Business Journal that "all of these stores will be examined." And for more closures to be aware of, check out This Beloved Brand Is Closing All But 2 of Its U.S. Stores.
On Nov. 30, the British retail empire behind Topshop moved into administration, the U.K.'s equivalent of Chapter 11 bankruptcy protection. It has been a rough year-and-a-half for Topshop's parent company, Arcadia Group, which has 444 stores in the U.K., 22 internationally, and about 13,000 employees, according to The New York Times. All 11 U.S. Topshop stores were closed by mid-2019, although the brand—and its counterpart, Topman—have remained available online and through Nordstrom.
Arcadia said the coronavirus played a major role in the company's current state. "The forced closure of our stores for sustained periods as a result of the COVID-19 pandemic has had a material impact on trading across our businesses," a spokesperson said in a statement to Sky News on Nov. 27. And for more retail news delivered right to your inbox, sign up for our daily newsletter.
Tween brand Justice announced in November that it would be closing all of its locations by early 2021. But this may not be the end of Justice just yet. Its parent company, Ascena Retail Group Inc., sold the brand to Bluestar Alliance LLC for around $90 million, and Bluestar plans to rebuild and grow Justice.
"Justice is an important asset with years of growth ahead. An icon of tween culture, with its influence felt across fashion, lifestyle, pop culture and more, we see opportunity for global brand extensions and partnerships," Bluestar CEO Joseph Gabbay said in a statement. And for another iconic business that's suffering, check out This Beloved Restaurant Chain Just Filed for Bankruptcy.
Carter's and OshKosh B'Gosh
Even the largest baby and children's clothing company in the U.S. can't survive the pandemic unscathed. Carters, the parent company that includes Carter's stores and OshKosh B'Gosh brands, recently announced that around 200 of its stores—which boils down to 35 percent of its brick-and-mortar locations—would be shuttering for good.
"Nearly 60 percent of those closures may occur by the end of the year," Carters CEO and chairman Michael Casey said on an earnings call in late September. "And 80 percent of those closures are planned by the end of 2022." And for another shutdown you should know about, know that This Beloved Coffee Chain Just Announced It's Filed Bankruptcy.