Bebe and Bluestar Acquire Gifts Retailer Brookstone

Bebe Stores Inc. announced it has partnered with Bluestar Alliance to acquire the brand name and related assets of beleaguered gifts-and-gadgets retailer Brookstone for an undisclosed price.

In August, the Merrimack, N.H.–headquartered Brookstone filed for Chapter 11 bankruptcy protection. The retailer announced it would close its mall stores and focus on 35 airport stores and its e-commerce site, Brookstone had assets of $50 million to $100 million and liabilities of $100 million to $500 million.

Bebe, headquartered in Brisbane, Calif., also is rallying from tough times. In 2017, it shuttered all its physical stores and sold half the brand for $35 million to Bluestar Alliance, a New York brand-management company, in order to avoid declaring bankruptcy. Manny Mashouf, Bebe’s founder and chief executive officer, said Brookstone would support growth for his company.

“Brookstone is a unique brand with strong growth potential,” Mashouf said. “We are pleased to expand our already-successful relationship with Bluestar and can see the potential synergies with other brands in their portfolio. This investment, a direct result of our partnership with B. Riley Financial, which sourced the deal, will create a strong platform for future growth and enhance our ability to generate free cash flow to maximize our dividends to shareholders.”

Joseph Gabbay, Bluestar’s chief executive officer, said the deal would revive Brookstone.

“We are excited to begin renewing Brookstone’s innovation and its flow of new products to the market,” he said. “London Luxury is the brand’s first new licensee, known for its expertise in the bedding, home textile and memory-foam categories. We are thrilled to have London Luxury as our licensee partner as they exemplify the standard consumers expect from the Brookstone brand.

“We are also seeing strong interest from a myriad of prospective licensees as well as enthusiastic retail partners,” he continued. “Contracts with best-in-class manufacturers in key categories, including massage, home environment, audio and travel products are expected to close this week.”