Francesca’s, the women’s apparel and footwear retailer, has filed for bankruptcy with plans to emerge through a sale process.
The company walked into its bankruptcy case in Delaware late Thursday with a letter of intent with investment firm TerraMar Capital, for either TerraMar or an affiliate to be its stalking horse bidder in a sale process as the case progresses, according to the retailer. The company also added that a “number of other parties” are also conducting due diligence on the sale prospect.
In a statement, the retailer said it plans to execute a sale of its “core retail locations as well as its promising digital expansion and new brand launches.” The company, which last month said it plans to close 140 locations by Jan. 30, is entering the bankruptcy with 558 locations. As the retailer works to renegotiate rent during the bankruptcy process, it may close more stores, it said.
Francesca’s has also entered the proceedings with an agreement from its lender Tiger Finance LLC for a $25 million debtor-in-possession loan that the court is expected to consider for customary approval at an initial hearing in the case.
“Implementing this process allows Francesca’s to address our lease obligations and seek a new investor that can see Francesca’s into the future,” said Andrew Clarke, the retailer’s chief executive officer.
“The financing provided by Tiger will enable Francesca’s to pursue a sale process that will allow us continue to focus on our omnichannel strategies, optimize our boutique fleet, broaden our customer reach with brand extensions and drive sustainable, profitable growth,” he said.
“We are excited by the potential partnership with TerraMar and we share their belief in the future of the business. In addition, a number of other parties are currently engaged in the due diligence process to become the owner of a new and revitalized Francesca’s,” Clarke said.
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