Usually, when a retailer is in financial trouble, seasoned observers see the signs.
A month before JCPenney filed for Chapter 11 bankruptcy, for example, regular shoppers noticed that inventory was thin. You might see the shirt, shoes, or pair of pants you wanted, but it would only be available in less common sizes.
That’s because when stores start saving cash, they reduce inventory.
In many cases, this becomes a death spiral because when consumers visit a retail store and cannot get what they want, they either go elsewhere in the mall to make the purchase or buy it online.
There are, however, cases where the closing of a retail chain surprises its customers, and that is likely the case with the sudden holiday weekend decision for Francesca’s to close all of its stores.
Over the holiday weekend, shoppers discovered clearance sales already underway at Francesca locations across the country.
Additionally, visitors to Francesca’s website likely noticed something was amiss when they were greeted with a banner that read “last chance, online only warehouse sale.” The site offers 30% off most items and a large clearance section marked “$15 and under.”
Other sections of the site are offering up to 80% off, but no mention is made of the closure. This news, however, has been confirmed as the company said it will be “liquidating our inventory and closing soon,” a representative confirmed to Women’s Wear Daily (WWD).
The fashion news outlet reported that the sudden closure and liquidation was due to unpaid sellers.
“One of Francesca’s sellers said the liquidation is believed to include ‘inventory that has not been paid for.’ The seller also claimed the firm is owed $250 million in unpaid invoices, saying “there has been no correspondence from the corporation with any of the sellers,” WWD reported.
Francesca’s did not return requests for comment on the allegations.
The mall chain with more than 450 stores has not filed for Chapter 11 or Chapter 7 bankruptcy. Multiple media reports say the chain is expected to file for Chapter 11 bankruptcy as soon as Tuesday, Jan. 20, when federal courts reopen after the federal Martin Luther King Jr. Day holiday.
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Francesca’s, a longtime women’s clothing and accessories chain, is closing all remaining stores nationwide and liquidating inventory, according to Women’s Wear Daily.
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The retailer, which has grown to operate more than 450 boutiques in the United Stateshas begun “last chance” and warehouse sale pricing while working through inventory before closing its doors.
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Even well-traveled locations, including a store in a major shopping area like Disney Springs, are expected to close as part of the nationwide closing, Disney Dining reported.
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The company previously filed for Chapter 11 bankruptcy in 2020, according to PacerMonitor.
In 2020, Francesca’s filed for bankruptcy and closed hundreds of locations, according to the Houston Chronicle.
At the time, the retailer blamed the pandemic and increased competition from online retailers. In 2021, the company changed ownership and was sold for $18 million to an affiliate of TerraMar Capital and Tiger Capital.
And while a number of mall retailers, including Claire’s and Forever 21, have filed for Chapter 11 bankruptcy in 2025, it’s not really fair to blame mall traffic.
More retail:
“Visits to indoor malls increased by 1.3% in 2025 compared to the previous year, according to Placer.ai’s December 2025 Mall Index.
“Outdoor malls led the pack during the holidays, with annual traffic up 2% in Q4 and 1.5% in December. Malls lagged behind, however, with a 1.1% year-over-year decline in 2025 and a 0.7% decline in Q4,” the data shows.
Most of Francesca’s locations are in traditional indoor malls.
Francesca’s Facebook page advertises the sale of the website, but does not explicitly acknowledge that the chain is closing nationwide. The chain’s Instagram page is also promoting the sale, but has disabled comments.
Customers posted on Reddit that the clearance will begin on January 16 in all stores.
“This post is about Francesca’s boutiques,” one user wrote. “Starting January 16th, they will start clearance in all their stores. I don’t know what the sales will be yet, but they will be big. Come shop!”
Francesca’s appears to be part of a larger trend, as Forever 21 and Claire’s both targeted similar customers.
Greg Portell, senior partner and global markets leader at Kearney, said Forever 21’s bankruptcy was predictable.
“In the case of Forever 21, the reasons cited by management were all known at the time of the first bankruptcy,” he told Retail Brew via email. “Forever 21 either did not recognize those threats or did not address them when it had bankruptcy protection. Ultimately, any company should expect competition and can benefit from working to anticipate these moves.”
That chain has also suffered from changing consumer trends.
“As consumer awareness of the environmental impact of fast fashion has grown, Forever 21 has struggled to align its business model with a more sustainable and ethical approach,” Denise Green, director of graduate studies in Cornell University’s fiber science and apparel design program, told the retail news site. “The company’s over-expansion and inefficient supply chain further exacerbated the financial problems.”
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This story was originally published by TheStreet on January 18, 2026, where it first appeared in the Retail section. Add TheStreet as a favorite source by clicking here.