Francesca’s going into Chapter 11, seeks sale

Francesca’s Holdings Corp. said late Thursday that it has filed for Chapter 11 bankruptcy protection and will seek to auction off its core retail locations and what it described as its “promising digital expansion and new brand launches.”

“After thoroughly evaluating all strategic alternatives, the board of directors unanimously agreed that pursuing a sale of the business is a necessary step forward for the business,” the company said in a release.

The ailing Houston-based retailer hinted at the possibility of bankruptcy in September, when it reported dismal second quarter earnings. It went further last month in a filing with the U.S. Securities and Exchange Commission announcing the planned closing of 140 stores by the end of January, calling a bankruptcy filing “likely” if the companywasn’t able to secure additional funding.

In its announcement Thursday night, the company said it had reached an agreement with Tiger Finance LLC, an existing lender, for a $25 million debtor-in-possession financing facility that, if approved by a bankruptcy court in Delaware, would allow it to continue operations “including the timely payment of employee wages and benefits, continued provision of customer orders and shipments, and payment of other obligations during the Chapter 11 cases.”

The company said TerraMar Capital, a Los Angeles investment firm, would become the stalking horse bidder for the auction and sale process.