The speciality retailer filed for Chapter 11 bankruptcy court protection in Delaware on Thursday. Tiger Finance LLC will provide $25 million in a debtor-in-possession financing facility. The retailer also has inked a letter of intent to sell its business to TerraMar Capital, which will be the stalking horse bidder in a bankruptcy court auction. The company has 558 boutiques in operation, though it previously said it would close 140 shops.
“The letter of intent is subject to customary closing conditions, including the execution of a definitive asset purchase agreement, and contemplates the purchase of Francesca’s as a going concern,” the retailer said.
“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 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,” Andrew Clarke, CEO of Francesca’s, said. “We are confident that we will emerge from this process as a stronger company poised to drive growth by exploring new brand avenues, expanding our e-commerce channels, and providing our customers with the latest fashion options and treasure hunt experiences they know and love us for.”
FTI Consulting Inc. and FTI Capital Advisors have been hired as the retailer’s financial advisor and investment banker, respectively.
The retailer said it expects interested buyers to submit bids by Jan. 13, 2021, with an auction to be held no later than Jan. 15, 2021.