Things at Francesca's have been quiet in the months since the company shook up its executive team and announced it was looking for a suitor — and investors will have to wait a little longer to hear how the company did last year.

The apparel and accessories retailer is now on a cost-cutting mission, "aggressively working to optimize the boutique real estate portfolio to improve their financial performance," according to a Thursday press release. In other words, store closures are imminent, although the company did not indicate how many. The company has already laid off an undisclosed number of employees, "in both the corporate office and field management," which has garnered "$15 million in annualized gross SG&A savings," according to the release.

The retailer on Thursday said it would delay the release of its fourth quarter and final year report, telling the Securities and Exchange Commission that it "requires additional time to complete its year-end closing procedures because the Company cannot timely complete its year-end closing procedures without unreasonable effort or expense while simultaneously undergoing its previously announced review of strategic and financial alternatives." 

In its release, the retailer did provide a preliminary peek at its final quarter, and it sounds like things were alarmingly quiet at stores, too. Net sales for the quarter are projected to fall 14% to $119.3 million from $138.5 million a year ago, as comparable sales are also expected to fall 14% as a result of traffic declines in the low-teens. The company had expected store comp sales to decline 10% to 15% — and the latest report reflects its sixth where that metric has been down by double digits. Those results also landed Francesca's on Retail Dive's most recent bankruptcy watch list.

Its troubles extend to the web, according to GlobalData Retail Managing Director Neil Saunders. "All of this is compounded by the fact that Francesca's has been slow to adapt to online," Saunders told Retail Dive in an email. "Its online sales penetration is way below its peers and traffic to its site is poor for a retailer of its size and scale. The brand simply doesn't put enough effort into digital marketing and is far from being an online destination, even among its core demographics."

Its financial picture is also somewhat dire. As of Feb. 2, the company estimated its cash and cash equivalents at about $20.1 million, with $10 million outstanding under its asset-based revolving credit facility. As of April 6, its cash and cash equivalents had fallen to about $14.2 million, with $15 million outstanding under its ABL revolving credit facility and another $9 million in availability. The company is hoping for a tax refund to help, saying in its release that it "expects to receive an IRS refund of $8.4 million before the end of fiscal May 2019."

Its fourth quarter, however, should have been a boon, noted Nick Egelanian, president of SiteWorks. "They should be their strongest coming out of Q4 — and that's not good news at all that they drained a third of their cash," he told Retail Dive in an email. "I think they have to become a much smaller company."

Who will buy Francesca's?

It's difficult to picture a rival scooping up Francesca's, given its emphasis on brick and mortar — the company runs more than 700 stores, according to its latest release — and what analysts describe as its ill-defined customer base. 

"Part of the problem is the company's exposure to failing malls, which means that footfall at some stores has dropped dramatically," Saunders said. "However, conversion rates have also fallen online and in stores, because the offer is very unfocused and has no clear target market. Product prices are also expensive compared to fast fashion rivals, which deters many customers from purchasing."

Michael Prendergast, who has been serving as interim chief executive after the February departure of Steve Lawrence, said that Francesca's is "well underway" in its turnaround.

But since January, the clouds over the company have only darkened. On Feb. 1, The Nasdaq Stock Market sent a letter indicating that the retailer was at risk of being delisted because the company had failed to meet the requirement to maintain a stock price of $1 per share for the previous 30 consecutive business days, according to a Feb. 4 SEC filing. In order to regain compliance and continue trading on the Nasdaq market, the company has 180 business days to bring that price up; otherwise it would need to move to a market with less stringent rules.

In the days since, the share price has remained well below a dollar, although executives are likely still working on finding a buyer, which could entail bringing the company private and rendering that particularly problem moot.

In the meantime, the company has lost many of its institutional investors. "That's not surprising — lots of institutional shareholders are prohibited from having positions in companies not listed on a major exchange," Alon Kapen, a partner at law firm Farrell Fritz, who heads the emerging companies and venture capital practice group, told Retail Dive in an interview.

So who would buy Francesca's?

"The poor performance has affected the bottom line and the company is firmly in the red, year to date. This is one of the reasons why it has looked to execute a sale," Saunders said. "The problem with any kind of transaction, is that just isn't an attractive buy. It's in a tough part of the market, has no real brand strength and has a host of issues that have yet to be resolved."

The share price is so low — it's hovered around 70 cents for weeks now — that the retailer could be bought on the open market, but the board is likely to stymie that, Kapen said. The board is divided into three classes, each subject to election at each annual meeting of stockholders, with each director elected for a three-year term and until his or her successor has been duly elected and qualified, according to the company's website.

"Someone who wants to take control of the company by taking control of the board just forces the acquirer to have to do it over the course of years," Kapen noted about that election policy. "If someone were to swoop in and basically take control of this company on the cheap without paying a premium or what would be considered fair market value, this is where the fiduciary obligations of the board come in to make sure that doesn't happen, to protect the company and its shareholders from that kind of hostile acquisition."

Chief Financial Officer Kelly Dilts, who earlier this month received a $380,000 retention bonus to stay on for a year, according to an SEC filing, and a few days later received 347,126 shares, according to another filing, did not respond to several requests from Retail Dive for comment and information regarding the company's next steps. In a phone interview, Chief Boutiques Officer David Minnix referred Retail Dive to Dilts.

That suggests that the company is focused on financial levers to pull itself up, although there have been some improvements in stores observed by Saunders. "There have been attempt[s] to make changes, including refreshing ranges and producing better window displays," he said. "However, these have largely fallen short. It seems that Francesca's doesn't really know how to change or get out of its current rut."