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Francesca’s CEO Says ‘No Playbook’ Is New Normal For Retail

Francesca’s CEO Andrew Clarke told PYMNTS that the traditional seasonality and calendar mindset of what a customer wants at a particular time of year “has been completely upended.”

For example, even as back-to-school shopping ramps up, Francesca’s is still seeing plenty of travel and vacation spending, as well as an increase in apparel for dating and social events.

“We’re also navigating some really wide swings geographically in terms of demand for physical shopping versus online shopping, and I think that will continue to be with us as we move through the back half of the year,” Clarke said. While last year was about survival for Francesca’s, this year is about growth. “The past year or so has taught us the value of constant innovation, thinking differently about the way we go about solving old problems,” he added.

The Texas-based specialty retailer filed for bankruptcy protection in December, and was sold to stalking-horse bidders TerraMar Capital and Tiger Capital earlier this year. Clarke said the reorganization post-bankruptcy gave Francesca’s the opportunity to rethink the way it approaches sourcing and its vendor base, utilizing shipping routes in Europe, North Africa and India that the company did not previously use.

“We need to recognize that the supply chain issues are global issues — it’s worldwide, as is COVID-19 — though the effect of the shipping issues … is highly nuanced according to different parts of the retail world,” Clarke said. For example, retail in Europe has been much more impacted by lockdowns than in the U.S., which has in turn impacted demand and production for European retailers and the vendors they source from. “The team at Francesca’s spotted that opportunity, and we have been able to gain a foothold and production slots that we wouldn’t have otherwise sourced from.”

Retailers across the world are increasingly uncertain about what comes next as the Delta variant continues to spread and consumer preferences continue to evolve. In light of this, Clarke has told his employees not to be afraid to think differently or to do things differently than in the past, “because right now, there is no playbook. In my 27-year career as a retailer, I have never experienced anything like this, and neither has anybody else.”

Reacting and Pivoting

Because of the volatility of the last 18 months, Clarke told PYMNTS that Francesca’s has adopted a culture of not taking anything for granted. “The team is not looking into the crystal ball to predict what we should be selling six months from now,” Clarke said. “We have adopted a much closer-to-market process, which has really served us well,” and has allowed the retailer to react to consumer demand more quickly than before.

In order to make this happen, as well as avoid the impacts of tangled supply chains, Clarke said Francesca’s has been trying to hold fabric near its U.S. warehouses that can be turned into different garments based on what customers are asking for at any given moment. “We can’t get ahead of ourselves, and the team has been awesome at navigating almost by the end of their noses,” he said.

Related: New Study: Bring-It-to-Me Economy Ascends As Consumers Embrace Home-Centric Lifestyles

According to research conducted by PYMNTS in collaboration with Carat from Fiserv, consumers’ expectations have been rapidly changing, with 72 percent of millennial retail shoppers making more online purchases than in March 2020, while 64 percent of shoppers of any age report the same.

Francesca’s has also found that its customer base is also changing, causing the retailer to debut a new collection of items for younger consumers, called Franki, earlier this year. Franki started in five stores and online, but has now expanded to almost 200 stores and has become a standalone brand within Francesca’s portfolio. “We brought that idea to market in around 100 days, and the customer has driven the pace at which we’ve scaled it,” Clarke noted.

In time for the holiday shopping season, Clarke said that two standalone Franki boutiques will open, though he declined to specify locations, as deals with landlords have yet to be finalized. Francesca’s also uses data and analytics to get insights into what customers are buying, and how they’re reacting to items and experiences both online and in-store.

“We have pivoted into a business whose strategies, in terms of what we sell and how we communicate with our customers, is now driven by those customers,” the CEO said. “Our model has adapted because our customer told us it had to.”

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