Francesca's CEO Resigns, Retailer Explores Potential Sale
Francesca's CEO Steve Lawrence has resigned as the struggling Houston-based retailer explores "strategic alternatives," including a potential sale. The women's apparel and accessories chain announced Thursday it has appointed Michael Prendergast as its interim chief executive effective immediately, following Lawrence's resignation Wednesday. Prendergast is a senior director in the private equity performance improvement division of Alvarez & Marsal, a New York-based professional services firm. Francesca's also announced its board of directors has begun a review of its financial alternatives to maximize shareholder value, including a potential sale of the company, a financing or a refinancing.
Total Retail's Take: The specialty retail sector, particularly apparel targeted to younger women, has been hard hit by declining foot traffic and sales. Francesca's had already taken steps to reduce costs — it announced that it would be closing up to 40 stores this year — but apparently more needs to be done. A sale of the business seems to be the next step; if that proves unsuccessful, a bankruptcy filing would appear to be on the horizon. As traditional brick-and-mortar retailers are forced to adjust their businesses to compete with increased online competition, there are going to be some that don't survive. Let's hope Francesca's isn't one of those brands.