Women’s specialty chain Francesca’s is preparing to shut down.
According to one source, the retailer’s merchants were “let go yesterday with no warning.” And one of the chain’s former buyers indicated that Francesca’s intends to liquidate all goods.
When contacted for comment, a customer service representative wrote in an email on Thursday that “we are liquidating our inventory and closing soon.”
The liquidation is believed to include “inventory that has not been paid for,” according to one of Francesca’s vendors. This vendor, who noted that the firm is owed $250 million in unpaid invoices, said that “there has been no correspondence whatsoever from corporate to any of the vendors.”
Other sources indicated that the liquidation of inventory is expected to start on Friday at the chain’s stores.
Founded in 1999, the specialty chain began trading publicly on the Nasdaq Global Select Market in July 2011. The chain’s troubles were compounded during the COVID-19 pandemic when nonessential stores, such as fashion retailers, were closed as consumers were told to shelter in place. Francesca’s filed a Chapter 11 petition for bankruptcy court protection in December 2020. It was sold in February 2021 to TerraMar Capital’s affiliate Francesca’s Acquisition LLC for $18 million. Tiger Capital and SB360 Capital Group were also part of the group that acquired Francesca’s out of bankruptcy.
As part of its plan for growth, the company created the Franki by Francesca’s line so it could chase the tween market. And in May 2023, the specialty chain acquired the Miley Cyrus and Suki Waterhouse approved start-up Richer Poorer. But that acquisition added overhead costs to its already stretched balance sheet, including additional staffing costs.
By January 2024, word surfaced in the marketplace that Francesca’s wasn’t paying its bills. Vendor sources at the time said they hadn’t been paid for months, although they were still getting orders and the retailer expressed expectations for timely deliveries. Some vendor sources also said that apparel companies that were factored were no longer getting approval for shipments. Other vendor sources such as accessories firms said many smaller companies, including themselves, were electing to take on the risk of shipping to the retailer because they needed the sales and were hoping the liquidity issues would get resolved.
Two months later, Francesca’s was forced to cut costs, which included eliminating some store leadership positions. The company has been plagued by complaints from customers noting they waited for months for refunds on returned goods, and that in some cases social media postings indicated that those refunds never arrived.
Liquidity constraints didn’t stop the chain from expansion plans. The retailer in April 2024 opened a store at American Dream in East Rutherford, N.J.
It wasn’t immediately clear when the company’s website was updated regarding store locations. The current listing of stores, outlet locations and Franki doors indicated that several hundred are still in operation.
