Clothing and accessories company Francesca's replaced its chairman and CEO on Friday, and its shares surged in midday trading.
The Houston company named former Signet CEO Michael Barnes as its new chairman, president and CEO. Neill Davis had been president and CEO of Francesca's and Greg Brennerman had been chairman of the board. Brennerman will stay as lead director, while Davis is resigning from the company. He became a director of the company in 2007, became CEO at the beginning of 2013, and was named president in January 2014.
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Barnes was named CEO of Signet Jewelers Ltd. in 2011 and oversaw its purchase of smaller competitor Zale earlier this year before he left the company in October. He is also a former president of watch and handbag retailer Fossil.
Francesca's Holdings Corp. also forecast third-quarter results that were at the low end of its expectations. But its shares rose $2.81, or 24 percent, to $14.37 as Wall Street took a positive view of the change.
"We think the company now needs a stronger focus on merchandising," said KeyBanc Capital Markets analyst Edward Yruma. He called the move a "strong positive."
Jefferies analyst Randal Konik said he's "optimistic" that things will improve for Francesca's and that Francesca's jewelry business should do well under Barnes.
Both analysts rate Francesca's shares at "Buy."
Francesca's has been expanding quickly in recent years, and it currently has 538 stores in 47 states and Washington DC. In its last fiscal year, revenue grew 15 percent but net income fell 5 percent. In its company's latest quarter, which ended in August, sales rose 9 percent but net income dropped 29 percent.