A few weeks after seeing first-quarter sales drop nearly 50 percent, Francesca’s is hoping “better late than never” applies to its newly launched mobile strategy.
Francesca’s is launching its first mobile apps for iOS and Android users, with the former coming this summer and the latter set to debut later this year “in time for Black Friday and the holiday season.” Software-as-a-service mobile commerce company Poq is developing the apps for the women’s specialty apparel retailer.
While the company stated that the new mobile apps will provide an “elevated design, improved navigation and increased ease of use,” Francesca’s was vague about any remaining details. Poq has already developed apps for numerous apparel brands and retailers including Belk, Cotton On, SurfStitch, Feelunique, Missguided and Kurt Geiger.
“Given the accelerating shift to online shopping, we are excited to be stepping up our digital transformation strategy with the launch of this mobile app,” said Andrew Clarke, CEO at Francesca’s Holdings Corp. “In addition to enhancing her online shopping experience, the app will provide valuable insights into how customers interact with our brand, enabling us to interact with her in a more relevant and impactful way.”
Francesca’s partnered with Poq for its “extensive expertise in building mobile shopping apps that empower businesses like ours to engage customers and facilitate financial success,” he added.
In a first-quarter earnings call, Clarke noted that the mobile app could help the financially challenged chain accelerate demand among its core 18- to 24-year old demographic. He also pointed out the company’s plan to hire a dedicated head of e-commerce to lead digital efforts, but did not give a timeline for the process.
The Poq software itself is designed to be content-heavy, including a content management system that enables users to manage their app campaigns with tools such as push messaging. Additionally, with a Software Developer Kit (SDK) or API extensions, users can customize the app to fit any brand experience or integrate with existing services.
The app launch news feels somewhat like a Hail Mary, arriving the morning after Francesca’s announced it is delaying its 10-Q quarterly report filing even further due to the significant disruptions in the company’s business, supply chain and overall operations resulting from the COVID-19 pandemic. The retailer said it needs additional time to complete the impairment assessments of its long-lived assets (which include any asset that the business expects to retain for at least one year) for the quarter, including the related income tax effect.
Due to the late filing, Francesca’s entered into an agreement to amend its credit facilities, lowering the minimum liquidity requirement from $15 million to $10 million. As of June, the retailer has cash assets of $21 million, helped by efforts to monetize existing inventory, aggressively reducing costs and deferring payments for rent, inventory and other accounts payable.
Wall Street responded positively to the news of the amendment, with Francesca’s stock skyrocketing as much as 136 percent to $8.19 per share in the opening of trading on July 2. As of 1 p.m. ET, stock remained up 64 percent.
Like many specialty apparel companies, Francesca’s had desperately needed a shot in the arm well before the coronavirus pandemic ravaged its sales. The company said it experienced “significant” declines in comparable sales, net sales and gross profit since 2017 in its annual report in May, revealing it has doubts about its ability to continue as a “going concern.”
But with all 703 of the company’s stores shuttered throughout the pandemic, further putting a dent in the company’s bounce-back attempt, bankruptcy becomes more and more of a possibility.
The company said it could default if it fails to get back into compliance with its real estate rental bills, for which it received a waiver when it violated terms for nonpayment. Payments, including deferred amounts, resume this month.