Bebe Stores Inc. seems to have a new lease on life as fourth-quarter results reflect a profit compared with the year-ago loss.
For the three months ended July 2, Bebe posted net income of $25.1 million, or 31 cents a share, against a net loss of $5.2 million, or 7 cents, a year ago. Net sales were down 9 percent to $94.9 million from $104.3 million. Comparable-store sales improved sequentially during the quarter, down 10 percent in April, down 6 percent in May, but up 1.3 percent in June.
The company in June inked a deal with Bluestar Alliance for licensing opportunities for the Bebe and Bebe Sports brand. That transaction puts Bebe’s IP assets into a joint venture, while the company — which remains public — retains ownership and operating control of its stores and e-commerce site.
Manny Mashouf, founder, chairman and chief executive officer of the retailer best known for its party-girl image, said, “To date, Bluestar has signed 14 new licensees including Global Brands Group, Major Brands PVT, Mamiye Brothers Inc. and PPI Apparel Group.”
He also noted the changes Bluestar has implemented in sourcing and production: “The significant reduction from 220 days to 105 days in our design-to-market process has allowed us to improve our product offering and return to our historical model of test and chase. These changes combined with the $25 million annual reduction in SG&A give me confidence as we enter the new fiscal year.”
It was under Mashouf’s tenure that Bebe in its heyday became a sought-after brand, mostly from selling frocks more suited for clubbing. But then the party dress category hit a roadblock and there were several executive changes, including Mashouf taking a step back at the firm he founded. Last year, the company tried to shed its party-girl image, incorporating more dress casual and business chic styles. The push into bohemian looks backfired, particularly over holiday, and Mashouf — the company’s largest shareholder — re-entered the picture earlier this year.
Shares of Bebe closed down 13.4 percent to 66 cents. The company reported earnings after the markets closed.