Francesca’s sales fall 50%, sees ‘bright spots’
Francesca's Holdings Corp. is reeling from the impact of COVID-19.
In preliminary results for its first quarter, the accessories and apparel retailer on Thursday said that net sales fell 50% to $43.8 million. It also said that it it is seeing some bright spots after reopening 593 of its 703 stores nationwide, with more to reopen as restrictions are lifted.
“While we continue to navigate through this difficult period, we are highly encouraged to see bright spots in our business driven by the new strategies that we have been testing and scaling,” said CEO Andrew Clark. “We are very pleased with the continued strong momentum in our e-commerce business and heartened by the sales results in the boutiques we have reopened.”
However, as previously reported, the retailer warned that it might not be able to survive the pandemic.
“As a result of the COVID-19 pandemic, the company’s revenues, results of operations and cash flows continue to be materially adversely impacted which continues to raise substantial doubt about its ability to continue as a going concern,” Francesca’s stated. “Management continues to take aggressive and prudent actions to reduce expenses to preserve cash on hand.”
Since the outbreak of COVID-19, Francesca's has sought to improve liquidity by driving sales and monetizing existing inventory, aggressively reducing costs, and managing cash flows. Together, these measures, along with deferring rent and vendor payments, enabled the company to increase its cash position to approximately $21.0 million as of June 12, up from $14.3 million as of May 2.