Thu 12/03/2020 20:17 PM
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Relevant Document:
Voluntary Petition

Francesca’s Holdings Corp., a Houston-based apparel, jewelry, accessories and gift retailer with approximately 558 locations in 45 states, and its subsidiaries filed for chapter 11 protection this evening in the Bankruptcy Court for the District of Delaware. The company reports $264.7 million in assets and $290.5 million in liabilities as of Nov. 1. The debtors are represented by O’Melveny & Myers and Richards, Layton & Finger as co-counsel and FTI Capital Advisors as financial advisor and investment banker. Francesca’s is also working with Tiger Capital Group as store closing sales consultant. Stretto is the claims agent. The case number is 20-13076. Continue reading for our First Day team's analysis of Francesca’s Holding Corp. chapter 11 filing and Request a Trial for access to the above documents and analysis as well as our coverage of thousands of other stressed/distressed debt situations.

According to a press release, “francesca’s® intends to use these proceedings to implement a sale process focused on the Company’s core retail locations as well as its promising digital expansion and new brand launches.” The press release adds that the company intends to file a motion for authority to pursue an auction and sale process under Bankruptcy Code section 363 and “expects to move through the sale process as expeditiously as possible.” According to the press release, the debtors have received a $25 million DIP financing commitment from its existing lender, Tiger Finance, and have entered into a letter of intent with middle market investment firm TerraMar Capital for TerraMar or an affiliate to become the stalking horse bidder in an auction and sale process.

“Implementing this process allows francesca’s® to address our lease obligations and seek a new investor that can see francesca’s® into the future,” the release follows. “The financing provided by Tiger will enable francesca’s® to pursue a sale process that will allow us continue to focus on our omni-channel strategies, optimize our boutique fleet, broaden our customer reach with brand extensions and drive sustainable, profitable growth,” Francesca’s CEO Andrew Clarke says in the release.

The press release envisions the following sale timeline:

  • Jan. 13: bid deadline;

  • Jan. 15: auction deadline;

  • By Jan. 20: sale conclusion.

On. Nov. 16, the company announced the closure of approximately 140 stores. Today’s press release says that 558 boutiques remain open for business as of today.

Holders of at least 5% of the company’s equity include Cross River Capital Management.

The debtors’ list of 30 largest unsecured creditors consists primarily of rent and merchandise claims ranging from $200,923 to $573,636, along with three litigation claims of unknown amounts.

Reorg First Day will provide a full summary once the first day briefing is complete.
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