Bebe to shutter 21 stores, mulling more closures

PHOTO CREDIT WIKIMEDIA COMMONS

Store closures have already been a part of Bebe’s ongoing restructuring efforts: Last month the retailer said it planned to shutter as many as 25 Bebe and outlet stores this year, which would decrease total store square footage by some 16%. Bebe reportedly is also mulling moving entirely online — joining Loehmann’s and Dehlia’s — a risky move considering that stores help drive digital sales.

Unlike many retailers in similar positions, though, Bebe has had some breathing room because it doesn’t have a lot of debt. Last summer the retailer raised some money through a deal with brand management company Bluestar Alliance to develop its wholesale business abroad, where Bebe retains a higher profile than in the U.S. The company has said that it hopes to manage a turnaround without resorting to bankruptcy protection.

As it’s struggled with declining mall traffic and other headwinds bearing down on apparel retail, Bebe has also faced pressure from private equity investor Consac LLC, whose president, Ryan Drexler, in 2014 began leaning on Bebe to consider a sale or go private, expressing criticism of what he called Founder Manny Mashouf’s “questionable” financial holdings.

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