B. Riley Financial boosts ownership in Bebe Stores
B. Riley Financial has increased its stake in fashion brand Bebe Stores as its legendary founder plans to “step down.”
The financial platform has signed an agreement to purchase 3.7 million shares of common stock of Bebe Stores from trusts formed by Bebe founder Manny Mashouf at $5.00 per share for a total purchase price of $18.5 million. With the closing of the transaction, B. Riley's total ownership of bebe will be approximately 76% of the shares of common stock outstanding. Mashouf will continue to own approximately 4% of the company’s outstanding shares.
“Having founded Bebe more than 45 years ago, it has been a continuous and integral fabric of my life ever since,” said Mashouf. “There inevitably comes a time to step away, and I intend to step down from my roles at Bebe in the near future. It has been an extraordinarily memorable and rewarding journey creating Bebe into an iconic brand that has embodied the fashion-forward woman with the confidence to be her best self.”
Founded in 1976, the Bebe brand is known for its on-trend women’s fashions and accessories. In 2018, B. Riley assisted the retailer with its shift away from brick-and-mortar retail to focus on e-commerce and brand licensing. (Bebe also owns a joint venture interest in the Brookstone brand and certain Buddy's Home Furnishings Rent-to-Own stores.)
"Manny is a fashion innovator and the vision behind bebe during his 45-plus year tenure as Chairman and CEO, said Bryant Riley, chairman and co-CEO of B. Riley Financial. “We greatly appreciate his continued leadership since our involvement with the company in 2018. This is an opportune time to increase our investment in bebe, and we expect that our expanded involvement in bebe's operations will add value based on our extensive experience in brand licensing and deep understanding of the rent-to-own industry. We expect this transaction to be accretive to B. Riley's EBITDA."
The closing date of the transaction is expected to occur on September 30, subject to the satisfaction of certain closing conditions.
Riley added that Bebe's brand licensing investments have generated approximately $11 million per year in cash flow before corporate expenses to Bebe over the past three years.
Bebe was B. Riley's first brand licensing investment that led to the formation of its expanded brand portfolio with equity interests in Hurley, Justice, and Scotch and Soda, as well as controlling interests in six other brands: Catherine Malandrino, English Laundry, Joan Vass, Nanette Lepore, Limited Too and Kensie.