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Francesca’s has issued another warning that it could go bankrupt FootwearNews.com reported. In a filing on Monday with the Securities and Exchange Commission, the already-struggling retailer announced that the coronavirus-induced shutdown of its more than 700 boutiques from late March through the end of April had led to significant declines in its comparable sales, net revenues and gross profits. It expressed a need to obtain additional financing to keep its business up and running or enter into chapter 11 protection. The warning comes a month after Francesca’s said it had substantial doubt about its ability to continue as a going concern. It has also failed to pay rent on its leased locations for the months of April, May and June, which it said violates certain covenants under its asset-based credit and term loan agreements. As of Feb. 1, Francesca’s had 5,236 employees — 1,159 of which work full time and 4,077 part time — but it furloughed “substantially all of our corporate and boutique employees” in mid-April as part of broader efforts to improve liquidity. It has also reduced the base salaries of its senior leadership team, as well as suspended all capital expenditures and limited its investments in e-commerce.

Many small-business owners across the country are testing their workers to catch potential coronavirus outbreaks before they start, eager to keep their companies afloat as the U.S. economy and regions of the country reopen in varying stages, the Wall Street Journal reported. Small businesses, which typically have fewer financial reserves than large firms, are grappling with the logistics, costs and privacy implications of testing workers. “There’s been a rubber band of stress around my head since March,” said Sara Polon, the owner of Washington, D.C.-based Soupergirl, who began testing workers three weeks ago. A doctor reports to her storefront and commercial kitchen each week, swabbing the back of employees’ noses or throats one-by-one. Polon isn’t sure how long insurance companies will continue to help offset the cost of testing but says she feels she is making life-or-death safety decisions that ripple through the families of her workers. While the federal government made funds available to small businesses through Paycheck Protection Program loans, most of those funds had to be used for specific purposes like payroll so they would be forgiven. That has meant testing and other safety precautions are an added financial burden at an already difficult time. The Centers for Disease Control and Prevention doesn’t dictate whether and how frequently employers should test workers for the virus, but it has published considerations for critical businesses like food processors that implement testing strategies. The CDC says such testing should only be implemented if it leads to actions like quarantining sick people and taking a risk-based approach to testing those who may have been exposed.
The agency advises businesses of all sizes to conduct daily health checks, implement social distancing practices and encourage employees to wear face masks.

Automakers are speeding up U.S. assembly lines to meet recovering demand, increasingly confident coronavirus safety protocols are working to prevent outbreaks in their plants but wary of the challenges workers face outside, Reuters reported. Screening workers for COVID-19 using temperature scans and questionnaires, the automakers have detected some people who reported for work despite being sick. Some plants have been briefly shut down for disinfection, but so far, there has not been a major outbreak within a U.S. auto plant since most reopened May 18, company and United Auto Workers union officials said. The risk of an infection picked up outside a plant spreading along assembly lines remains a prime concern, however. An outbreak could shut down a factory costing a manufacturer millions of dollars a day. The disruption caused by the pandemic is creating other challenges as well. At Ford Motor Co.’s F-series pickup truck plant in Louisville, Ky., the company has given more than 1,000 workers leave related to COVID-19 concerns. It hired temporary workers to fill their jobs as the plant accelerates production of trucks critical to Ford’s financial recovery. Officials of UAW Local 862, which represents workers at the Louisville plant, said a lack of child care was a significant issue for members. It had led many to stay away from the plant and collect increased unemployment benefits provided under the CARES Act. Ford has now begun arranging subsidized child care for UAW workers, said Gary Johnson, the automaker’s head of manufacturing.

The New York City panel that sets rents for the roughly 2.3 million residents of rent-regulated apartments yesterday froze those rents for a year, delivering a slight reprieve to tenants struggling in the worst economy in decades, the New York Times reported. By a 6-to-3 vote, the panel, the Rent Guidelines Board, approved a measure that froze rents on one-year leases at their current levels and imposed a similar freeze in the first year of two-year leases, while allowing landlords to raise rents 1 percent in the second year. The vote came after dueling proposals offered by the board’s tenant and landlord members failed. The tenant proposal would have frozen rents for two years, while the landlord members sought to raise rents 2 percent on one-year leases and 5 percent on two-year leases.

More U.S. companies have sought bankruptcy protection during the last two days than in the prior two weeks combined, data compiled by Bloomberg show. The seven filings since Sunday exceeds the month’s five through June 13, which was relatively light for companies seeking shelter from creditors. The chapter 11 spree was a mix of consumer names like 24 Hour Fitness Worldwide Inc. and Pyxus International Inc., plus energy, health care and two new software filings. Skillsoft Corp.’s chapter 11 makes this a record year for software bankruptcies, with four cases so far. Technology overall is having its busiest year since 2009. This week’s filings pushed the year’s bankruptcy total to 111, the most since 2009 for the first six months of a year, data compiled by Bloomberg show. Filings from the consumer cyclical sector total 32 year-to-date, the most for any comparable period since 2009, when there were 41. Consumer non-cyclical filings total 26 — also the highest since 2009 — and the sector remains under pressure from lockdowns that have crushed demand. The energy sector is the second biggest contributor to this year’s bankruptcy surge. Chesapeake Energy Corp. is preparing a potential filing that could hand control to senior lenders. Meanwhile, California Resources Corp. got an extension until June 30 to make interest payments originally due May 29.

Pressure is building on the Trump administration to disclose the names of borrowers that received loans through the Paycheck Protection Program, and a key senator signaled that the names of larger loan recipients could be released, the Wall Street Journal reported. The Small Business Administration has so far not made public the list of roughly 4.6 million businesses that have received more than $512 billion from the pandemic emergency lending program since early April. The agency is holding out despite growing demands for the data from government auditors, media companies, public interest groups and Republicans and Democrats in Congress. All contend disclosure is essential to determine whether the huge program is working as intended. “We will have PPP loan disclosure,” Sen. Marco Rubio (R., Fla.), chairman of the Senate Small Business Committee, wrote Tuesday on Twitter. Rubio, who has worked closely with the Trump administration on the PPP, said that there is “no dispute over larger loan recipients being disclosed” but that discussions were still under way on “how to treat smaller loans to mostly micro-business, sole proprietors & independent contractors.” Rubio’s expectation of disclosure contrasted with comments last week by Treasury Secretary Steven Mnuchin, who said during a hearing before Rubio’s committee that the administration isn’t publicly disclosing the identities of PPP loan recipients. Read more. (Subscription required.) 

In related news, the House Small Business Committee will hold a hearing tomorrow at 1 p.m. ET titled "Paycheck Protection Program: Loan Forgiveness and Other Challenges." To view the witness list, access a link to the live hearing webcast and additional hearing information, please click here. 

24 Hour Fitness Worldwide Inc. said yesterday that it is negotiating with Cerberus Capital Management LP, Sculptor Capital Management Inc. and other investors funding the company’s bankruptcy on potential transactions that would cut debt and get the ailing gym chain out of chapter 11, WSJ Pro Bankruptcy reported. The San Ramon, Calif., company outlined steps it intends to take to adjust its operations to withstand the fallout from the coronavirus pandemic, which has upended the business and the fitness industry generally. Gold’s Gym International Inc., a competitor, filed for chapter 11 protection last month and the parent company of New York Sports Clubs warned this week that it may also seek bankruptcy. During a telephone hearing yesterday, Judge Karen Owens of the U.S. Bankruptcy Court in Wilmington, Del., said that she would grant 24 Hour permission to begin drawing from a $250 million chapter 11 loan, backstopped by investors that own the majority of the company’s senior loans and unsecured bonds. Lawyers for 24 Hour said that the funding is a crucial first step to stabilizing the business, which has generated virtually no revenue since mid-April because of pandemic-related closures. Investors backing the loan include Sculptor, Cerberus, Cyrus Capital Partners LP and Franklin Advisers Inc., court papers said. The group owns more than 60 percent of the company’s $930 million in senior debt and more than 70 percent of $500 million in unsecured bond debt.

The Trump administration is preparing an up to $1 trillion infrastructure package focused on transportation projects as part of its push to spur the world’s largest economy back to life, Reuters reported. The Department of Transportation’s preliminary version reserves most funds for projects such as roads and bridges, but will also set aside about a quarter of the money for priorities such as 5G wireless infrastructure and rural broadband. The White House, which has made similar proposals in recent years, is aiming to unveil its latest effort in July, one of the sources said. The administration proposal would extend the law authorizing highway and other surface transportation funding. The current law, known as the FAST Act, authorized $305 billion over five years and is set to expire on Sept. 30. The White House is likely to propose a 10-year reauthorization of the measure, which would be the longest-ever surface transportation bill and is set to release its proposal as early as next week.

Federal Reserve Chairman Jerome Powell is likely to face more lawmakers’ questions today about how Congress should design any future economic relief measures amid the coronavirus pandemic, the Wall Street Journal reported. Powell will testify for a second day on Capitol Hill, this time before the House Financial Services Committee starting at noon ET on Wednesday before answering questions from the panel members. Congress faces deadlines this summer over how to address expiring provisions of relief measures for businesses and unemployed workers, following nearly $3 trillion in emergency spending earlier this year. Elected officials in both parties have long used the Fed chairman to serve as an expert witness on economic subjects that the central bank has little authority over. During his testimony yesterday in front of the Senate Banking Committee on Tuesday, Powell tried to avoid appearing too involved in partisan spending discussions while signaling support for more funding in at least three broad areas: (1) aid for unemployed workers; (2) funding for cities and states; and (3) virus suppression.