In a Securities and Exchange Commission filing, the accessories and apparel retailer warned that its liquidity has been adversely impacted by negative operating results due to the pandemic and “there is no assurance that we will have sufficient liquidity to continue operations.”
Francesca’s, which has 703 stores, had been struggling pre-pandemic with declining sales and profits for the past couple of years amid declining mall traffic. In early May, the company issued a “going concern” warning and floated the idea of bankruptcy.
In its latest SEC filing, Francesca’s said that it may be required to delay, reduce, and/or cease operations and/or seek bankruptcy protection if unable to generate or obtain the financing it needs to continue doing business.
“We cannot provide any assurance that we will be able to secure sufficient liquidity to fund our business operations, including through additional financings, re-financings, or that we will be able achieve positive results through our growth strategy,” Francesca’s stated. “If we are unable to generate or obtain the requisite amount of financing needed to fund our business operations or execute our growth strategy, our liquidity and ability to continue operations could be materially adversely affected. As a result, we may be required to delay, reduce and/or cease our operations and/or seek bankruptcy protection.”
Francesca’s also said that it will delay filing its first-quarter earnings report because it needs additional time to assess the impacts of the COVID-19 pandemic on its "long-lived assets for the quarter, including the related income tax effect."