Bebe Stores forms global JV with Bluestar Alliance

Bebe Stores has entered into a joint venture with Bluestar Alliance to take over its global marketing and store operations, including in Asia.

Bluestar, a privately owned brand management company founded in 2006, has paid US$35 million to Bebe Stores for its minority stake in the new company. Until now, Bluestar has managed a plethora of little known brands spanning mass market to luxury, but with cumulative international sales of $1.5 billion through some 200 licensees. Those brands include Kensie, Nanette Lepore, Catherine Malandrino, Michael Bastian, English Laundry and Limited Too.

Bebe founder, chairman and CEO Manny Mashouf says while Bebe is “one of the great global brands in the women’s fashion world”, the value of the brand, its reach and potential is clearly not reflected in investors’ current perception of the company and its valuation.

“The strategic decision to aggressively pursue a licensing strategy allows us to capitalise on the value of our brand in all categories and channels on a global scale. We have seen significant demand from prospective licensees and expect to generate long-term, committed royalties.”

The new JV will manage the brand in both domestic and international markets, including in China where Bebe has achieved rapid growth since forging a five-year partnership with Shanghai-based brand agency Longgoal LLC last August 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 summer 2016.

Joseph Gabbay, Bluestar CEO said Bebe is an iconic contemporary women’s brand with a loyal customer base and growing international presence.

“We believe the company has significant long-term growth potential given its distinct market position, multiple channels of distribution and growing international brand awareness. We see a tremendous opportunity to leverage our brand expertise and capitalise Bebe’s differentiated market position to build a global contemporary lifestyle brand.”

So far, Bebe has licensees in just 20 international markets. It operates 147 retail stores under its own brand and the sister label Bebe Sort, bebe.com and 39 outlet stores in the US, Canada and Peurto Rico.

The company embarked on a restructuring plan in February after announcing a second quarter loss, laying off 45 employees and replacing then-CEO Jim Wiggett with Mashouf.