Clothing retailer Francesca's (NASDAQ: FRAN) is closing 140 stores across the country as it struggles with its finances amid the coronavirus pandemic. The company has stated that it is looking at additional options to stabilize its finances, up to and including bankruptcy.
Like many retailers, Francesca's finances have been badly hurt by the coronavirus pandemic. The company's situation has deteriorated badly, to the point where it is closing 140 stores by next year. The closures will run up a bill of about $29 million to $33 million, and it may not be enough to help the company stay afloat.
"If the Company is unable to raise sufficient additional capital to continue to fund operations and pay its obligations, the Company will likely need to seek a restructuring under the protection of applicable bankruptcy laws," Francesca's said in an 8-K filing.
Francesca's would join the ranks of other retailers forced into bankruptcy by the pandemic, including JC Penny (OTC: JCPNQ), Neiman Marcus, Stein Mart (OTC: SMRTQ), Lord & Taylor, and Brooks Brothers. Some of those that have declared bankruptcy have been able to secure buyers and will continue operations in a reduced capacity. JC Penny is one such retailer, being bought by Brookfield Property Partners (NASDAQ: BPY) and Simon Property Group (NYSE: SPG). Others, such as Stein Mart and Lord & Taylor, have been forced to shutter completely, with Lord & Taylor's new owners stating that the company would go completely online.
The pandemic has been a nightmare for Francesca's financial situation, as well as its stock. The company has lost roughly 74% of its market value, year to date. The company retains a market value of just $7.2 million, a far cry from a year ago. News of the closures and potential bankruptcy badly rattled investors, causing Francesca's to lose 29% of its share value during trading on Monday, plummeting it $2.52 from an opening price of $3.53.