Steve Birkhold resigned Thursday as chief executive officer of Brisbane, Calif.-based Bebe Stores Inc. after 17 months on the job, a tenure marked by declining sales and persistent losses.
Jim Wiggett, ceo of the Jackson Hole Group consulting firm and a longtime adviser to Bebe, has been appointed interim ceo as the firm begin its search for a permanent successor. Manny Mashouf, founder and non-executive chairman of Bebe, called Wiggett “a highly accomplished executive with proven leadership capabilities, retail and merchandising expertise and a wealth of strategic business knowledge, and we look forward to his insights into the strategic direction of the company.”
Wiggett is a former LVMH Moët Hennessy Louis Vuitton executive who served as president and ceo of sephora.com and in senior positions with Macy’s Inc.
Several sources said Birkhold’s departure came as no surprise considering Bebe’s recent financial performance and the sale, on May 29, of his entire stake of 141,000 shares of company stock for $4.07 a share. Shares dropped 16.7 percent, to $3.39 from $4.07, on June 2, as investors learned of the liquidation of his position. They were down 1.8 percent to $3.30 Thursday following Birkhold’s resignation.
“It seems his departure was already factored in,” said one analyst, requesting anonymity.
Calls to Bebe seeking comment weren’t returned.
Despite some recent signs of nominal improvement, Birkhold had been unable to reverse the company’s losses and declining net and same-store sales. Comparable sales, including e-commerce and catalogue, declined 8.6 and 7.1 percent, respectively, in the third and fourth quarters of fiscal 2013, his first two quarters at the firm, as losses for the six months totaled $70 million. In the first nine months of the current fiscal year, through April 5, the net loss fell to $38.9 million from $56.7 million, while net sales dropped 7.6 percent to $365.5 million and comps fell 3.3 percent with 19 fewer stores than in the previous year’s quarter. Although net sales were down 17.2 percent, to $93.5 million, in the third quarter, as the company’s net loss was cut in half, Birkhold said upon the release of quarterly results on May 8 that he was encouraged by “improved sales and margin performance in both our e-commerce and catalogue businesses” during the period.
Reacting to those results last month, Janney Capital Markets analyst Adrienne Tennant noted that comps during the quarter ended in April were flat in the West, where weather exacted a smaller toll on retailers than it did in the East and Midwest. “We continue to believe that the product has consistently improved with each successive flow,” she wrote in a research note in which she maintained her “buy” rating.
However, she noted that the company was on a pace to burn through $60 million in cash this year. It had $116.9 million in cash and cash equivalents at the end of its third quarter.
Birkhold, former ceo of Diesel USA, resigned as ceo of Devanlay U.S., operators of the Lacoste business in the U.S., to take the Bebe post, succeeding Mashouf.