Bebe Stores Dismissing Hundreds of Employees
Bebe Stores Inc., which has been in financial hot water for some time, is laying off more than 700 employees at its two business offices and at its stores.
In notices filed with the state Department of Employment on March 27, Bebe said it would be laying off 136 workers at its headquarters in Brisbane, Calif., and another 160 employees at its Los Angeles design office.
More than 400 retail workers at 35 California stores in cities such as Brea, Camarillo, El Segundo, San Diego, Torrance, Concord, Glendale, Irvine and Los Angeles were issued pink slips. The layoffs are effective May 27.
Emails asking for a comment from the company’s president and chief operating officer, Walter Parks, were not returned.
But the move is not surprising. In March, Bebe Stores, known for sexy, contemporary designs, announced that its board of directors was exploring strategic alternatives and had retained B. Riley & Co. as its financial advisor. It also hired a real estate advisor to determine what to do with its store leases.
At the time, Bebe operated 134 retail stores, 34 outlets and its online website.
In a Bloomberg News report, Bebe Stores executives were quoted as saying they wanted to close all their retail outposts and concentrate on online sales to avoid bankruptcy.
Bebe has been a familiar name in shopping malls since the 78-year-old Manny Mashouf, born in Iran, founded the company in 1976. In recent years, the company has been going through financial difficulties with a revolving door of executives trying to find the golden formula for success for a company that lost nearly $220 million in the last five years.
Last year, Mashouf returned to his post as chief executive officer. But his return didn’t help the bottom line. For the second quarter of fiscal 2017, net sales were $101.9 million with a net loss of $5.23 million. For the same period one year earlier, net sales were $122.4 million with a net loss of $5.45 million.
Revenues for the company in fiscal 2016 were $393.6 million, down from $484.7 million in fiscal 2013.
Last year, Bebe sold nearly half of its brand to Bluestar Alliance, a brand management company. The move raised $35 million and was intended to help Bebe develop a wholesale licensing business.
Bebe is just one of several big-name California retailers falling on hard times. BCBG Max Azria filed for bankruptcy protection in February and is closing 120 unprofitable stores in the United States, leaving 70 locations open.
Los Angeles-based American Apparel filed for bankruptcy protection last year and sold its brand name for $88 million to Canadian T-shirt manufacturer Gildan Activewear, which chose not to take over the more than 100 American Apparel stores in the United States.
The Wet Seal, another California retailer that had been on the financial ropes for years, filed for bankruptcy for a second time in February and recently closed all its stores.