Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Francesca's Floundering, But The Model Can Still Work

The list of disappointing specialty retailers is getting longer, but Francesca's (NASDAQ:FRAN) has really gotten on the bad side of Wall Street with a series of weak quarters. Some of the more bearish analysts are claiming that Francesca's model is fundamentally broken, and that the company's differentiated store concept just doesn't work.

With seven straight quarters of weakening sequential comps, not to mention weak merchandise margins and inventories that go against the supposed virtues of the model, it's difficult to say that the bears don't have a point. Even so, I believe it is hard to fairly judge any retail concept when miserable weather is shutting stores and keeping shoppers at home. I'd also point out that even...

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