Bebe Sells Distribution Center and Puts LA Design Center Up for Sale
Bebe Stores, the decades-old retail chain that closed all its outposts at the end of May, has sold its distribution center in Northern California for $22 million.
With that sale behind it, the company is now trying to sell its Los Angeles design center as the company winds down its brick-and-mortar operations and becomes a company that makes money off its brand name.
Bebe anticipates closing the sale of its Benicia distribution facility northeast of San Francisco in the next 60 days, the company said in a press release.
Bebe Stores, based in Brisbane, Calif., said it had terminated all its 168 store leases at a cost of approximately $65 million. Its leases were mostly in malls owned by Simon Property Group Inc. and General Growth Properties.
The winding down of operations has resulted in about 700 employees being laid off at its headquarters, design center and retail stores.
Meanwhile, the retail chain has entered into a $35-million loan agreement with GACP Finance to make payments to the retail store landlords, pending the closing of the building sales.
Last year, Bebe sold nearly half of its brand to Bluestar Alliance, a brand management company, which raised $35 million and was intended to help Bebe develop a wholesale licensing business.
Into this joint venture with Bluestar Alliance, Bebe has transferred both the bebe.com URL and international wholesale agreements. The joint venture has also set up a royalty agreement with a third party for both the URL and wholesale licenses.
Going forward, Bebe said it will have no stores and its sole form of revenue will come from royalty income from the joint venture.
B. Riley & Co. was a financial adviser to Bebe on this transition.
For years, Bebe has been a mainstay of the California retail scene. The company was founded in 1976 by Manny Mashouf, who is still Bebe’s chief executive officer.
Bebe Stores is just one of a growing number of West Coast retailers that have struggled. BCBG Max Azria in Los Angeles filed for Chapter 11 bankruptcy protection in February, and The Wet Seal, headquartered in Irvine, Calif., closed its store doors earlier this year. In March, Wet Seal sold its brand name in a bankruptcy auction to Gordon Brothers for $3 million.