Francesca’s Buys California Startup Richer Poorer
Little more than two years after a cash crunch and Chapter 11 collapse, Francesca’s Acquisition said “I do” to Richer Poorer, the Southern California T-shirt and sweatpants brand counting Miley Cyrus, Suki Waterhouse, and Jessica Alba as fans.
“The Richer Poorer acquisition bolsters channel reach, including leveraging its robust wholesale network, and introduces new product categories to the brand’s portfolio mix,” according to Francesca’s, which worked with Tiger Capital to finalize the purchase of the dual-gender direct-to-consumer label, now operating as a wholly-owned subsidiary, on April 26. “This allows the company to grow its share of wallet among the Gen Z and millennial women’s segments.”
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In addition to selling clothes for men and women on its e-commerce site, Richer Poorer wholesales product with Nordstrom, Saks, Bloomingdale’s and Free People. With Richer Poorer under its wing, Francesca’s will be addressing a male audience for the first time.
Andrew Clarke, CEO of Francesca’s, said the “new cooperative of synergistic brands” created by the acquisition “allows us to benefit from a diverse bench strength of expertise” while making inroads with 20- and 30-something shoppers. He believes the deal will unlock greater efficiency on the operational front, in addition to enhancing the company’s omnichannel toolkit and creating new pockets of revenue.
In an email interview, Clarke reiterated the company’s focus on millennials and Gen Z consumers. “As we look to the future, we plan to keep our eye on brands that target those audiences as it presents great opportunities for Francesca’s to grow its share-of-wallet and visibility amongst a potentially new set of customers,” he said. The company, he continued, is looking at brands and products that complement what Francesca’s offers or diversify the company’s portfolio.
He declined to say whether the growing company would consider snapping up a tween brand to pair with Franki by Francesca’s, the label it birthed shortly after emerging from Chapter 11. “We have a set of filters and criteria relevant to our current and future customer segments that we are using to evaluate future opportunities, be they acquisitions, partnerships or otherwise,” Clarke said.
For any future acquisitions, he added, “we plan to leverage their retail strengths and identify how Francesca’s can amplify and support those distribution channels, whether it be integrating the product into our retail channel or having the brand live on its own.”
Clarke credited Richer Poorer’s management for growing the startup into a Gen Z-relevant brand that jibes with Francesca’s corporate culture.
Iva Pawling, CEO and co-founder of Richer Poorer, will continue to lead the brand in her newly expanded role as president of Richer Poorer, Franki and wholesale. The brand, born as a men’s sock maker back in 2010, will fully relaunch next year after it wraps up its current marketing agenda.
In addition to sweats and tees, Richer Poorer sells tanks, intimates, dresses and loungewear, with some eco-friendlier fabrics including Tencel lyocell, recycled fleece and organic cotton. It claims to work with “ethical factories” and said one of the way it gives back is through a supply chain traceability initiative.
When explaining how the deal came to be, Ryan Davis, Tiger Capital’s executive managing director, pointed to the “shifting DTC landscape” that’s driving even “strong” players such as Richer Poorer to pursue “new means of capital and growth.”
“As proven brand-builders, the teams at Francesca’s and TerraMar are ideally positioned to take the brand to the next level,” Davis added.
“Completing this acquisition is a meaningful step in the value creation plan for Francesca’s that was established in 2021 when we acquired the business,” TerraMar Capital’s managing partner Joshua Phillips said. “We look forward to continuing to evaluate other potential acquisitions in the space and working with Andrew and the Francesca’s management team to continue the work towards building the Francesca’s platform to recognize its full potential.”
Terms of the transaction were not disclosed.
The deal represents a remarkable turn of events for a company that went bankrupt in late 2020 after Covid store shutdowns crippled its already fragile finances. TerraMar Capital purchased the business and closed 97 stores on top of the 140 Francesca’s had already shuttered.
Francesca’s operated 461 stores when TerraMar closed the deal in February 2021 promising to keep at least 275 doors open. Since then the company has focused on growing e-commerce, scaling Franki, fine-tuning the store experience, launching the Fran Club loyalty platform and getting into resale with ThredUp through the Forever Fran platform.
