Signage for Francescas Collections, a subsidiary of Francescas Holdings Corp., is displayed outside a store in Shrewsbury, New Jersey.
Emile Warnsteker | Bloomberg | Getty Images
The clothing chain Francesca & # 39; s now plans to close another 97 locations after recently filing for bankruptcy protection. This is another blow to shopping mall owners.
The Houston-based company, which filed for Chapter 11 last week, had previously announced it would close about 140 of its 700 stores – about half of them in U.S. malls.
The bankruptcy filing and news of additional store closings come in the middle of the holiday season, following dozens of other clothing retailers, including J.Crew and Brooks Brothers, looking to restructure during the coronavirus pandemic. Francesca had to temporarily close its stores in March, causing net sales to decline 50% in the first quarter, raising doubts about his ability to stay afloat.
Francesca said it currently has a takeover bid from TerraMar Capital, which is acting as a bidder for Stalking Horse in its sales process. Existing lender Tiger Finance has committed to provide a $ 25 million bankruptcy loan. Francesca said it planned to close a sale by the end of January.
Francesca’s top rental companies include the owners of Simon Property Group, Brookfield, CBL & Associates and Pennsylvania REIT shopping centers. The latter two filed for bankruptcy protection last month injured by their retail, restaurant and entertainment tenants who are either not paying rent or closing their doors for good.
Another wave of bankruptcies and retail store closures is expected to kick in in early 2021 after businesses work through the holidays and are able to reevaluate their businesses' health.