Strategy

Bebe Stores to Shut Down All of Its Locations

A shift to online-only operations may be an option for the women's clothing chain, which has lost money for four straight years..
Matthew HellerApril 21, 2017
Bebe Stores to Shut Down All of Its Locations

Bebe Stores announced Friday it will close all of its stores, becoming another apparel retailer to have succumbed to online competition and shifting fashion tastes.

The women’s clothing chain said in a regulatory filing that it had hired liquidator Tiger Capital Group to sell all of its remaining inventory and it expects to close the stores by the end of May.

Bebe has not filed bankruptcy and didn’t provide details on its future plans but it is reportedly considering the possibility of moving its business online only. The company previously disclosed in March that it was exploring strategic alternatives.

At that time, it had 134 retail stores and 34 outlet locations and sold products through an additional 75 locations.

“The California-based company has been struggling to resonate with female shoppers and has lost money for the last four consecutive years,” Forbes reported. Sales have fallen in four of the past five years, plunging 17% to $101.9 million in the latest quarter.

Bebe is the latest in a parade of retailers to have recently closed their doors amid intense online competition and the popularity of fast-fashion and discount retailers like H&M and T.J. Maxx. Companies including Wet Seal and Payless have filed bankruptcy.

“One thing that Bebe has going for it is that it hasn’t taken on loads of debt in a bid to survive,” Forbes said. “Many of its fellow retailers, particularly those backed by private equity companies, can’t say the same.”

Bebe was founded by CEO Manny Mashouf in San Francisco in 1976. According to USA Today, its strategy was “based on designing and selling its own line of women’s clothing that it called ‘unique, sophisticated and timelessly sexy,’ which the chain said defined ‘next-generation chic while staying true to its assertive, provocative origins.’”

By closing the stores, Bebe expects to take a $20 million loss. In trading Friday, its shares rose 7.3% to $4.03.