Francesca's Holdings - FRAN . NASDAQ
Purchase Notes - September 2019
Francesca's operates a chain of women's fashion apparel boutiques spread out across 47 states. They offer a fun assortment of apparel, footwear, jewellery, gifts and accessories through their boutique-size stores which average less than 1500 square feet each. They specialise in fast fashion and rapidly changing inventory which brings in customers looking for fun and exciting new offerings.
The company was in growth mode up until operations began to slide a few years ago. They made missteps on their merchandising while continuing to spend on expansion. Sales dropped and expenses ballooned higher. The company began hemorrhaging money and the stock price sank from over $400 to less than $4. A new management team is taking over and the company has embarked on a plan to turn operations around. They have seen some initial success, posting a small quarterly profit and a reduction in the rate of decline in their comparable store sales.
This is a high risk, high reward situation. Bankruptcy is still a possibility if the company continues to lose money on an annual basis. On the other hand, a full or even partial recovery could lead to a substantial increase in the share price from the current $10.40 level.
What's changed since I made my first purchase of this stock? Follow the ongoing story in the posts below...