Investors are buying into Bebe Stores Inc.’s efforts at a turnaround.

This story first appeared in the January 14, 2015 issue of WWD. Subscribe Today.

Shares of the Brisbane, Calif.-based women’s specialty chain leapt 20.2 percent to $2.98 after the firm late Monday reduced its projected second-quarter loss and reported an 8 percent increase in comparable-store sales for the period.

For the three months ended Jan. 3, the company had projected that its comps would be flat to up at a low-single-digit rate. It now expects its adjusted net loss per share to be in the low-single-digit range, the high end of the low- to midsingle-digit loss expected when it reported first-quarter results in October. Analysts on average now expect a loss of 3 cents a share.

Bebe said the higher expectations came from “improved sell-through of the fall and holiday product offerings at higher [average unit retails] in both the Bebe and outlet businesses.”

Jim Wiggett, chief executive officer, said the company “maintained a less promotional strategy relative to last year and provided our customers with an enhanced lifestyle-oriented fashion assortment at attractive values and saw a favorable response.”

Addressing the ICR Xchange in Orlando Tuesday, Wiggett said Bebe was in the process of reclaiming its brand DNA after pursuing a look that was “very immature” and too young for its customer base, which spans women from their early 20s to late 40s.

“We confused the customer,” he said at ICR, adding that “brands sometimes get lost.”

Bebe, he noted, had become too closely associated with just one of the six lifestyle segments it addresses — party. Now it is making a full lifestyle presentation in six categories, starting with party but also including special occasion, business chic, dressy casual, Bebe Sport and logo.

“And I’m not taking logo off the product because my customer wants it and is buying it both in my outlet stores and my primary stores,” said Wiggett, the former ceo of who joined Bebe as interim ceo in June and relinquished the “interim” designation last month.

The confusion extended to Bebe’s marketing. “If we had your e-mail address, we were inundating you with messages from all parts of our business,” Wiggett stated.

Bebe previously published eight catalogues a year, a number that has been reduced to four with four digital catalogues making up the difference. “We’ve seen absolutely no drop-off in traffic,” the ceo said.

A “cleaner, brighter” store concept developed prior to Wiggett’s arrival has been adopted in seven stores with outstanding elements of it, such as jewelry tables, being rolled into additional units in the company’s fleet of 176 primary stores in North America. The company also operates 35 Bebe outlet stores, 104 international stores in 23 countries through licensees and an e-commerce site at E-commerce accounts for about 15 percent of overall revenues.

In the fiscal year ended July 5, the company incurred a $73 million loss on revenues that declined 8.2 percent to $425.1 million on a 3.2 percent decline in comps. It closed its 2B division this summer and made headcount reductions, including in its executive staff, to “stop the hemorrhaging,” Wiggett said, that preceded his arrival.

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