Francesca’s: The journey to a second bankruptcy for the US mall-based retail chain

US retail chain Francesca’s has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of New Jersey. The news comes after media reports speculated that the company was already in the process of liquidating its inventory and was planning to close stores.

At the time, it was suggested that Francesca’s was also eyeing a Chapter 11 filing, with this latest update confirming speculation. Court documents have shown that the store closing and liquidation process commenced January 14, at which time sales were launched at all retail locations.

The decision to pursue liquidation was made after the company faced supply chain disruptions, heightened by the loss of funding for two major suppliers, as well as failing to secure a capital injection in December 2025. These issues, alongside underperformance in non-core brands and a 2023 data breach, were cited as the reason for the bankruptcy, the second in the retailer’s lifespan.

"This process provides a structured path to pursue the best outcome for all stakeholders," said Curt Kroll, the brand’s chief financial officer, in a statement. "We remain focused on operating responsibly and supporting our teams, partners, and guests throughout this process."

Parent company Francesca’s Acquisition, LLC has outlined 10 to 50 million dollars in assets, next to 50 to 100 million dollars in liabilities. Funds will be made available to unsecured creditors, with Trixxi Clothing Company, Arc Textiles, Star Style Apparel and K & K Clothing listed as the creditors with the largest claims.

In addition, Altar’d State has been tasked with overseeing the sale process for Francesca’s intellectual property. Bidding starts at seven million dollars, according to a motion filed with the New Jersey bankruptcy court, reported on by Bloomberg.

Initial restructuring, acquisitions, and failed fundings

Founded in Houston in 1999, Francesca’s established itself as a specialty retailer of women’s apparel and accessories, with a focus on boutique-like experiences at its largely mall-based retail locations. While at one time, the company experienced rapid growth, peaking at 500 million dollars in sales between 2016 and 2017, it eventually encountered financial difficulties and operational challenges escalated by Covid-19, leading to a 2020 restructuring.

TerraMar Capital LLC stepped up to acquire the chain early 2021, taking the company private and embarking on a multiyear growth strategy that prioritised its e-commerce channel and scaling its tween brand, Franki by Francesca’s. Despite returning to profitability in the same year, prompting store expansion, a data breach in 2023 set the company back again, impacting sales and profitability.

MAS Acquisition then took over the business in 2024, launching a review of inventory and enacting cost reductions. These efforts, however, were offset by supply chain disruptions, leaving vendors unable to fulfill orders, and a challenging macroeconomic environment. Poor performance of third-party brands like Richer Poorer, which Francesca’s acquired in 2023, only emphasised the struggle.

After launching a failed search for additional funding to support operations in the latter part of 2025, Francesca’s received a notice of default from lenders in January 2026. Liquidation, and the resulting bankruptcy, were determined to be the only viable options that allowed the business to preserve its value. A court-supervised wind-down process is now being pursued.

Francesca’s currently operates 400 stores across 45 states largely located in malls and shopping centres, alongside its e-commerce platform. It employs around 3,000 staff, mostly among its retail network.