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Here’s Why Francesca’s Could Cut 189 More Stores

Francesca’s has new owners and $25 million in fresh financing.

Newly out of Chapter 11 bankruptcy, the women’s specialty fashion chain said on Monday that its sale for $18 million to Francesca’s Acquisition LLC, an affiliate of TerraMar Capital LLC,  Tiger Capital LLC and SB360 Capital Group LLC is complete.

Affiliates of Tiger and SB360, Tiger Finance LLC and Second Avenue Capital Partners LLC, have provided Francesca’s with a new $25 million asset-based revolving credit facility.

CEO Andrew Clarke said the sale “marks a new day” for Francesca’s, adding that the reinvigorated retailer looks forward to “exploring new brand avenues, expanding our ecommerce channels, and providing our customers with the latest fashion options and treasure hunt experiences they know and love.”

Though it has operated about 703 locations at one point, Francesca’s saw its brick-and-mortar network shrink to 558 before it filed for bankruptcy in December, when it announced it would trim a further 97 stores for its portfolio. When TerraMar and Tiger completed its purchase, Francesca’s had 461 boutiques across 45 states. But under the terms of the purchase agreement, Tiger gains control of some of Francesca’s assets, while TerraMar has agreed to keep at least 275 stores going. After doing the math, that would mean up to 189 more doors could be on the chopping block, though there’s little clarity on when any new store-closing decisions would be made.

For now, both TerraMar and Tiger executives said Francesca’s is newly positioned for growth, with TerraMar managing partner Joshua Phillips hailing the deal as a “new era” for the mall staple. Francesca’s, he added, has laid the groundwork “to provide great products for its customers but also expand new channels for growth.”

Andy Babcock, managing director at Tiger, said the acquisition represented an opportunity to create a sustainable business by adding the necessary financial resources to a high-quality brand.

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