Bebe Stores Inc. has confirmed the closure of at least 21 stores, and it will cost the company $9.4 million.
Bebe in a regulatory filing Wednesday said the company is committed to the closure of 21 store locations.
The same filing also said Bebe will incur an impairment charge related to the closed stores of $2 million, and will make a termination payment to the landlord of about $7.4 million.
Although the company said it is “continuing to explore options with respect to its remaining stores,” WWD heard from store associates last week that the company plans to shutter all doors by May 27 to focus on its online business.
Stores across the country — full-price stores and outlets — said final sales began on Saturday. That means that Bebe stores will no longer accept returns on merchandise. About 170 stores are affected by the decision to close.
Store associates also told WWD that Bebe told them it was anticipating about eight weeks for all store closures to be completed. While many stores would likely close before the eight-week period is up, a few could continue in operation until the final day — May 27 — depending on how fast the individual location can clear out of existing inventory.
Bebe has hired B. Riley & Co. as its financial adviser and its board is exploring strategic alternatives.
There were rumblings in the marketplace when the women’s specialty chain posted second-quarter results on Feb. 1 that the chain was pressured. The company back then said it would close up to 25 stores and outlets this year. For the three months ended Dec. 31, the company improved its net loss to $5.2 million from a net loss of $5.5 million a year ago, but saw net sales drop 16.8 percent to $101.9 million and comparable-store sales decline 10.5 percent.
A further sign of financial pressure was the leveraging of its brand equity through a new business model by entering into a joint venture last year with Bluestar Alliance LLC, allowing Bebe to remain a public company operating the stores and e-commerce site. Bebe contributed the brand’s intellectual property to the venture and Bluestar contributed $35 million. The venture is jointly owned by the two firms. Half of the royalties go to the joint venture and are distributed to Bebe on a quarterly basis.
And before the joint venture deal, Bebe in 2016 underwent a restructuring that saw its chief executive officer Jim Wiggett and chief financial officer Liyuan Woo leave the company. Bebe’s founder Manny Mashouf returned to the company fold as ceo, and Walter Parks rejoined the retailer as president, chief operating officer and interim cfo.
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