Shares of Bebe Stores Inc. leaped more than 14 percent Friday after the Brisbane, Calif.-based specialty retailer delivered a smaller-than-expected second-quarter loss and projected improved gross margins and same-store sales in the current three-month period.
For the quarter ended Jan. 4, the specialty retailer incurred a net loss of $5.5 million, or 7 cents a diluted share, against a loss of $4.8 million, or 6 cents, in the year-ago period. Analysts, on average, expected a 14-cent loss in the quarter.
Revenues were down 4.1 percent to $130 million from $135.5 million, and comparable-store sales were down 1.9 percent. Gross margin receded to 33.6 percent of sales from 33.9 percent in the second quarter of the prior year as the company worked through its inventories of older product and adjusted to the promotional tenure of the holiday season.
Finished goods inventory per square foot declined 6.8 percent.
Steve Birkhold, chief executive officer, said the firm experienced improvement as the quarter progressed and comps turned positive. “We saw a favorable response to the new merchandise and an increase in traffic despite declining mall traffic and an aggressive promotional environment across the industry,” he remarked. “We believe that the strong messaging in our marketing campaigns connected with our customer and contributed to the improvement in traffic.”
Bebe launched a campaign under the “No Resolutions, No Regret” banner, both online and offline, directed at New Year’s celebrants that “drove a tremendous amount of traffic in a pretty focused time period going back to our evening going-out-dress occasion,” Birkhold told analysts on a conference call.
For the third quarter, the company expects further reductions in inventory per square foot, a loss per share in the midteens, flat comps and improved gross margin.
Janney Capital Markets analyst Adrienne Tennant noted the decline in comps for the second quarter was smaller than the 3.4 percent decrease projected by Retail Metrics and that a 3 percent increase in December comps reflected “favorable response to new merchandise and an increase in traffic.”
Shares rose 69 cents, or 14.6 percent, to close Friday at $5.42.
Birkhold said that a new store prototype, which “more effectively represents our new sexy, edgier look,” will begin rolling out in April at the company’s store at The Mall at Short Hills in New Jersey. The new design should provide “improved store flow and [incorporate] better visual merchandising, including window displays and live-streaming of content on in-store screens that highlight newness.”
The ceo noted, “We have four planned and then we’re going to measure the [return on investment] prior, obviously, to a large rollout.”
The company also is converting its 32 outlet stores from its 2b brand to the Bebe moniker, he said.
Birkhold joined Bebe as ceo in January 2013 after serving as ceo of Lacoste North America and Diesel USA.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews