Andrew Clarke, 47, took over as the CEO of the attire retailer Francesca’s in March 2020.
Source: Francesca’s
When Andrew Clarke was in his late 30s, he was let go from a retail job as a result of of his sexual orientation.
“My boss at the time mentioned to me that my life-style was incompatible with the firm’s values,” mentioned Clarke, now a 25-year veteran in the retail trade who is additionally one of retail’s few brazenly homosexual CEOs.
“This was earlier in my profession, however it wasn’t that way back,” the 47-year-old mentioned. “I believe for the early half of my profession, I very a lot hid my personal life. I knew, in some of my earlier roles, that my boyfriend — who then turned my husband — would not be welcome at firm occasions.”
Today, Clarke serves as chief government officer of the Houston-based boutique clothes firm Francesca’s, however that have is nonetheless shaping his choices.
When he determined to pursue the Francesca’s gig in early 2020, he noticed a possibility to flip round an embattled chain that had reported two years’ value of losses. Francesca’s had discovered its title on a quantity of specialists’ chapter watch lists. But Clarke by no means may have predicted that his first day on the job final March can be 10 days earlier than the Covid pandemic pressured mall-based retailers, together with Francesca’s, to shut their doorways for months. A little over a 12 months into being CEO, Clarke finds himself working beneath new personal fairness possession that rescued the model out of a Chapter 11 submitting.
“My turnaround alternative at Francesca’s turned very a lot a battle for survival,” Clarke mentioned. “But I joined Francesca’s as a result of what I noticed was an actual alternative for this model that hadn’t actually been profitable for 2 or three years. I felt there was hidden gold.”
When the pandemic hit, stuck-at-home customers weren’t looking for attire, which made up greater than 55% of Francesca’s gross sales — with footwear, jewellery, equipment and presents accounting for the the rest. Francesca’s additionally had a skimpy exhibiting on-line, with e-commerce accounting for lower than 1 / 4 of its complete gross sales. That harm the enterprise terribly when its shops had been quickly darkish.
For the third quarter, ended Oct. 31, 2020, Francesca’s internet gross sales totaled $79.Three million, a 17% drop 12 months over 12 months, the company said in court documents.
On Dec. 3, 2020, Francesca’s filed for Chapter 11 bankruptcy protection, as a yearslong battle to get again to progress got here to a head. Its enterprise had hit a peak when it reported constructive EBITDA of $87 million in 2016, courtroom paperwork defined, which diminished to a loss of $62 million in 2020. Francesca’s joined a long list of apparel retailers that also filed for bankruptcy protection final 12 months, together with Brooks Brothers, J. Crew and the division retailer chain J.C. Penney.
The enterprise was offered to Francesca’s Acquisition — an affiliate of TerraMar Capital, Tiger Capital Group and SB360 Capital Group — in February. The deal enabled Francesca’s to emerge from chapter with a $25 million asset-based revolving credit score facility.
‘Big unlock’
“Although the pandemic was wreaking havoc throughout the retail trade — and we had been definitely not spared — … however that really was a giant unlock for us,” Clarke defined. “We mentioned, ‘We have to innovate. We have to change this mannequin. We have to do it in a short time if we’re going to be right here on the different facet of the pandemic.'”
Shedding underperforming brick-and-mortar shops has been one motion. Pre-bankruptcy, Francesca’s was already in the course of of closing unprofitable shops in malls. But a court-supervised restructuring course of allowed it to break leases and velocity up some of that work.
Under Francesca’s new house owners, no less than 275 shops will keep open. It has 460 working in the present day, down from the 558 areas the retailer had when it filed for chapter final December, and a good greater lower from the greater than 700 it had in 2019.
“On the shoulders of a efficiently right-sized footprint, we must always have the option to construct a very worthwhile omnichannel enterprise,” Clarke mentioned.
Clarke’s different focus is fixing the retailer’s merchandise. Prior to him becoming a member of Francesca’s, the model was most recognized for date-night outfits, clothes for varsity dances or graduations, and stylish work put on, Clarke mentioned. But it has wanted to shift as buyers hunt down extra informal and comfy choices.
Many attire retailers are grappling with this new desire. Apparel gross sales fell 19% final 12 months, according to The NPD Group, however classes reminiscent of sweatpants and pajamas reported progress. Even as folks look to refresh their wardrobes with new types, many are nonetheless in search of snug choices reminiscent of pants with elastic waistbands.
Francesca’s audience has historically been ladies ages 18 to 35, however the enterprise additionally now needs to attain youthful women. It not too long ago added a tween assortment, known as Franki by Francesca’s, which has a variety of extra dressed-down choices, together with graphic tees and distressed denim, in addition to crop tops and jumpsuits.
By going after Gen Z customers, Clarke hopes to attain a generation of shoppers that has confirmed it favors shopping for from manufacturers that stand for one thing and converse extra authentically of their advertising. His skilled background additionally makes him a becoming choose to be spearheading this shift. Clarke beforehand served as chief merchandising officer of the tween clothes and accessories model Justice. He additionally has run Kmart’s attire enterprise and led the ladies’s attire maker Loft.
‘Free to be you’
Clarke needs to make Francesca’s a secure house for purchasers and for workers — largely as a result of he remembers not feeling represented himself as a member of the LGBTQ neighborhood earlier in his profession.
“Being fired for the means I stay my life was a wake-up name for me — not about my values, but when I was ever ready senior sufficient to create and craft firm values, that will be the antithesis of what I skilled myself,” he mentioned. “And that is what we’re doing now at Francesca’s.”
Clarke has taken what used to serve solely as an inner motto to increase worker morale, “Free to be you,” and is making it right into a customer-facing slogan for advertising and graphics in shops. According to Clarke, this is one instance of how the firm is making an attempt to pivot to attain extra prospects, together with the LGBTQ neighborhood.
“As we take a look at the information round our buyer, we see a wealthy variety amongst our base,” the CEO defined. “And our methods have advanced to enchantment way more broadly to that numerous buyer.”
For Pride Month, Francesca’s has partnered with the gender-fluid trend label The Phluid Project. Select rainbow-inspired merchandise from Phluid Project shall be accessible on Francesca’s web site and in its shops, the firm mentioned.
But Clarke sees the potential to do way more.
“This journey we’re on — we’re at the starting,” Clarke mentioned. “We’re creating a brand new firm … it isn’t nearly Pride Month. It’s about constructing one thing way more longer-term. We are enjoying catch-up in some respects, from the inside out, and on the product facet we promote.”
He hopes that by being open about his sexuality to prospects and to staff, he will encourage others to be open as nicely.
“In order to change notion, perspective and to educate, it is necessary to have that illustration,” Clarke mentioned. “I’m lucky sufficient as an LGBTQ+ neighborhood member appointed to my function as the CEO of a public firm … I really feel completely answerable for making a secure, accepting, numerous working tradition and setting for all my associates. It’s as a lot inner because it is exterior.”
“At the starting of 2020, changing into the CEO of a public firm as a homosexual man … it is one thing I by no means thought I’d obtain,” he mentioned.