The beleaguered women's retailer Bebe is swiftly closing all of its stores following years of declining sales and losses.
The company's stock, which has long been on a downward decline and has shed a quarter of its value this year, slid 10% to $3.30 on Friday.
The women's clothing and accessories retailer said in a regulatory filing on Friday that it would move to close all of its stores by the end of next month. It also plans to liquidate all its merchandise and store furnishings.
Bebe, which had 180 stores at the end of last year, was founded by Iranian-born immigrant Manny Mashouf in 1976. It become known for its skimpy women's clothing and relied heavily on product placement on TV shows like Ally McBeal. Mashouf, who met his wife when she walked into a Bebe store, took the company public in 1998. He and his family were briefly billionaires in 2006 at the height of the company's success.
Yet, the California-based company has been struggling to resonate with female shoppers and has lost money for the last four consecutive years. Sales have fallen in four out of the last five years. During the latest quarter, Bebe's sales plunged 17% to $101.9 million.
Bebe's plan to close its stores comes less than a month after it said it was considering strategic alternatives. According to a Bloomberg report, the company is trying to stave off bankruptcy by closing stores and shifting its resources online. Bebe did not provide any information about its plans for the future on Friday.
As a result of the store closings, Bebe will incur an impairment charge of roughly $20 million to be recorded in the third and fourth quarters.
A host of other retailers, including BCBG Max Azria and Abercrombie & Fitch, have been shuttering stores as they struggle to compete with the rise of e-commerce and the popularity of fast-fashion and discount retailers like H&M and TJMaxx. A number of companies, from Payless to Wet Seal, have been forced to file for bankruptcy.
One thing that Bebe has going for it is that it hasn't taken on loads of debt in a bid to survive. Many of its fellow retailers, particularly those backed by private equity companies, can't say the same.
