Bebe looks to China for growth
Brisbane, Calif. – Bebe Stores Inc. continues to expand its global presence.
Bebe announced it has signed a five-year strategic cooperation agreement with Shanghai-based brand agency Longgoal LLC to open between 60 and 150 Bebe stores, shop-in-shops and third-party retailers in Greater China, Hong Kong, Macau and Taiwan. The first store is expected to open in the summer of 2016.
As a part of the agreement, Longgoal will open a minimum of 60 points of sale in mainland China, and identify third-party retailers in certain provinces of China to sublicense the brand for retail operations. Longgoal is currently identifying potential locations in Shanghai and Beijing, including flagship boutiques. After the five-year exclusive term, Longgoal retains an option for an additional 10-year partnership with Bebe based on performance.
Bebe plans to locally design and develop up to 30% of the product for China. In addition, the company anticipates expanding further into licensing agreements for handbags, shoes and intimates in the initial partnership phase.
“As we continue to expand our international footprint, our entrance into Greater China is a significant opportunity to accelerate that growth and reinforce Bebe as a global lifestyle brand for women,” said Jim Wiggett, Bebe CEO. “We look forward to working closely with the Longgoal team, who have a proven track record of success and operational experience in introducing high profile retail brands to this key market.”
The news came as Bebe reported that it shrunk its net loss in the fourth quarter. The chain reported a net loss of $5.2 million, compared to a $34.5 million net loss the prior year period.
Reduced promotions and markdowns, as well as lower selling, general and administrative (SG&A) expenses, helped Bebe reduce its loss. Net sales were $104.3 million, an increase of 0.7% from $103.6 million. Same-store sales increased 1.1%.
“We saw strong performance in key categories including tops and bottoms, although our Bohemian collection, particularly day dresses, did not perform to our expectations,” said Wiggett. “We believe that this coupled with the cutback in marketing investments over the past seven months impacted our business. Looking ahead, we are excited about our upcoming fall collections, and look forward to benefiting from a ramp up our marketing spend in August, however, we will be taking markdowns on slow moving merchandise which we expect to pressure sales in the first fiscal quarter of 2016.”
Net loss for fiscal 2015 totaled $27.7 million, down from $73.4 million the previous fiscal year. Net were $428 million, an increase of 0.7% from $425.1 million. Same-store sales increased 3.1%.
Net sales for the fiscal year ended July 4, 2015, were $428.0 million, an increase of 0.7% from $425.1 million for the fiscal year ended July 5, 2014. Comparable store sales for the fiscal year ended July 4, 2015, increased 3.1% compared to a decrease of 3.2% in the prior year.
Loss from continuing operations for the fiscal year ended July 4, 2015, was $25.4 million, or $0.32 per share, compared to a loss of $59.2 million, or $0.75 per share in the prior year.