Andrew Clarke, 47, took over the position of CEO of clothing retailer Francesca’s in March 2020.
Source: Francescas
When Andrew Clarke was in his late thirties, he was fired from a retail job because of his sexual orientation.
“My boss at the time told me that my lifestyle was incompatible with the company’s values,” said Clarke, now a 25-year retail veteran and also happens to be one of the few openly gay retail CEOs.
“That was earlier in my career, but it wasn’t that long ago,” said the 47-year-old. “I think that at the beginning of my career I hid my private life a lot. In some of my previous roles, I knew that my boyfriend – who would become my husband – would not be welcome at corporate events. “
Clarke is now chief executive officer of Houston-based boutique clothing company Francesca’s, but that experience still shapes his decisions.
When he decided to watch Francesca perform in early 2020, he saw an opportunity to reverse a contested chain that had reported casualties for two years. Francesca’s had his name found on a number of bankruptcy watchlists by experts. But Clarke could never have predicted that his first day of work also happened to be 10 days last March before the Covid pandemic forced the doors of retailers in malls, including Francescas, to close for months. After a little over a year as CEO, Clarke is working under a new private equity owner who saved the brand from a Chapter 11 filing.
“My turnaround chance at Francesca became a struggle for survival,” said Clarke. “But I came to Francesca because I saw a real opportunity for this brand that hasn’t really been successful in two or three years. I felt like there was gold hidden there.”
When the pandemic broke out, home stuck consumers weren’t buying clothes, which accounted for more than 55% of Francesca’s sales – the remainder was in shoes, jewelry, accessories and gifts. Francesca’s was also sparsely represented online as e-commerce made up less than a quarter of total sales. That did terrible damage to business when the shops were temporarily dark.
For the third quarter that ended October 31, 2020, Francesca net sales were $ 79.3 million, down 17% from a year earlier, court documents said.
On December 3, 2020, Francesca filed for Chapter 11 bankruptcy protection as a year-long battle to return to growth came to a head. Its business peaked when it reported positive EBITDA of $ 87 million in 2016, court documents said, which decreased to a loss of $ 62 million in 2020. Francesca is one of a long list of clothing retailers who also filed for bankruptcy last year, including Brooks Brothers, J. Crew and department store chain JC Penney.
The business was sold to Francescas Acquisition – a subsidiary of TerraMar Capital, Tiger Capital Group and SB360 Capital Group – in February. The deal enabled Francesca to get out of bankruptcy with an asset-based revolving credit facility of $ 25 million.
‘Big Unlock’
“While the pandemic has devastated retail outlets – and we certainly weren’t spared – … it was actually a great opportunity for us,” said Clarke. “We said, ‘We have to be innovative. We have to change this model. We have to do it very quickly if we are to be here on the other side of the pandemic.'”
The dismantling of underperforming stationary stores was one measure. Before the bankruptcy, Francesca was already in the process of closing unprofitable stores in shopping centers. But a court-monitored restructuring process made it possible to terminate leases and accelerate part of this work.
At least 275 stores will remain open under the new owners of Francesca. It has 460 locations today, up from the 558 locations the retailer had when it filed for bankruptcy last December, and an even bigger drop from the more than 700 locations in 2019.
“On the shoulders of a successful footprint of the right size, we should be able to build a truly profitable omnichannel business,” said Clarke.
Clarke’s other focus is repairing the retailer’s goods. Before joining Francesca, the brand was best known for date night outfits, dresses for school dances or graduation parties, and chic workwear, Clarke said. But it had to change as buyers look for more casual and convenient options.
Many clothing retailers are struggling with this new preference. Apparel sales fell 19% last year, according to The NPD Group, but categories like sweatpants and pajamas saw growth. Even when people want to freshen up their wardrobes with new styles, many are still looking for comfortable options like pants with an elastic waistband.
Francesca traditionally targets women between the ages of 18 and 35, but the company is now aiming to reach younger girls as well. A tween collection called Franki by Francesca’s was recently added, offering a range of more understated options, including graphic t-shirts and distressed denim, as well as crop tops and jumpsuits.
By tracking Generation Z consumers, Clarke hopes to reach a generation of shoppers who have proven they prefer to buy from brands that stand for something and speak more authentically in their marketing. His professional background also makes him a suitable choice to lead this class. Clarke previously served as chief merchandising officer for tween apparel and accessories brand Justice. He also ran Kmart’s clothing business and ran the women’s clothing company Loft.
‘Free to be you’
Clarke wants to make Francesca a safe place for customers and employees – especially because at the beginning of his career he didn’t feel represented as a member of the LGBTQ community.
“Getting fired for my way of life was a wake-up call for me – not because of my values - but if I were ever in a position high enough to create and shape corporate value, that would be the opposite of who I am I’ve seen it myself, ”he said. “And that’s what we’re doing with Francesca now.”
Clarke has taken what used to be an internal morale-boosting motto, “Free to be you,” and made it a customer-centric slogan for in-store marketing and graphics. According to Clarke, this is an example of how the company is trying to reach more customers, including the LGBTQ community.
“When we look at the data around our customers, we see a lot of diversity in our base,” said the CEO. “And our strategies have evolved to address these diverse customers much more broadly.”
For Pride Month, Francesca’s has entered into a partnership with the gender fluid fashion label The Phluid Project. Selected rainbow-inspired Phluid Project products will be available on Francesca’s website and in stores, the company said.
But Clarke sees the potential to do a lot more.
“This journey that we are on – we are at the beginning,” said Clarke. “We’re starting a new business … it’s not just about Pride Month. It’s about building something much longer-term. We’re playing catching up in some ways, inside out, and on the product side, we’re selling.”
He hopes that by being open to customers and employees, he will also inspire others to be open.
“In order to change perception, perspective and education, this representation is necessary,” said Clarke. “I am fortunate that I am called as a member of the LGBTQ + community in my role as CEO of a public company … I feel absolutely responsible for creating a safe, accepting and diverse work culture and environment for all of my employees as it is on the outside . “
He added: “Becoming a gay man CEO of a public company in early 2020 … I never would have thought that.”
Comments are closed.