Bebe Stores Inc. has been enriching the culture of retail clothier for women since 1976. The company has at the moment 312 stores scared across the United States, Puerto Rico, Canada, District of Columbia, and the U.S. Virgin Islands. The concept is present in the international market as well such as Turkey, Thailand, Kuwait, Israel, Singapore, Malaysia, Mexico, and others. However, as of recently, the company showed signs of switching off its traditional format and moving entirely on the online retail for good.
The Board of Directors Announced a Change of Direction, Possibly toward Online Retail
On Wednesday, the stocks of Bebe Stores Inc proliferated 16.32% to $4.49. This sudden booming comes as a consequence of the statement made by the Board of Directors. They announced a new strategic direction for the company. At the moment, they are in an overhaul process to find the most suitable alternative for Bebe.
“There is no assurance that this process will result in any specific transaction and it does not expect to disclose further developments during this process unless and until the Board of Directors has approved a specific transaction or otherwise determined that disclosure is appropriate.”
Even though Bebe declined to comment on the possibility of a major business format turnover, the media managed to contact sources familiar with the matter. These undisclosed sources stated that the company is struggling with major risks of bankruptcy. Furthermore, the organization intends to close around 170 of its stores in an effort to avoid filing for bankruptcy. However, if the board isn’t unanimous in the attempts to renegotiate leases, they might soon have no other choice than to file for Chapter 11.
The Company Deals with a Four-Year Decline
In February, Bebe Stores Inc. released its four quarter numbers. They showed a 16.8% decrease from the previous year with total net sales of $101.9 million. As a consequence, the net loss of the company was at 65 cents a share. Moreover, the store sales slipped by 10.5%. This marks a four-year decline, during which Bebe lost almost $220 million.
As the brick-and-mortar business continues to lose foot traffic, the company reorients its focus on online retail. However, analysts foresee a hard time for the company in this medium. The organization has to set up a seamless logistics system. The online orders need to rely on fast deliveries and a suitable returning policy. Otherwise, the public might lose interest and move to other competitors that have a more flexible online service.
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