Women'S Wear Bebe Pformation Business Model Will Remain Listed

Reportedly, caught in the awkward delisting.

Bebe Stores Inc. (NASDAQ:BEBE) did not avoid the possibility of joining the bankruptcy army to make compromises. The company issued a statement on Wednesday before announcing the company's intellectual property rights to form a joint venture with the brand management company Bluestar Alliance LLC.

Bebe Stores Inc. founder, chairman and chief executive Manny Mashouf said that the company has created a world-renowned company in the past decades.

And the current market value obviously can not reflect the actual valuation of the company.

Therefore, the establishment of a joint venture through the sale of IP will bring the brand to the world.

Manny Mashouf also said that the deal was unanimously agreed by the board of directors and the best choice for shareholders and companies.

As of Friday's close, Bebe Stores Inc. (NASDAQ:BEBE) shares were priced at $0.58, plunging 3.33% in the whole day, with a market value of only 46 million 420 thousand dollars.

According to the agreement,

It will get more than 50% of the joint venture with Bluestar Alliance LLC, and lose its brand intellectual property rights, while Bluestar Alliance LLC will inject $35 million into the joint venture company, and the 35 million US dollars will be pferred to Bebe Stores Inc. as the paction cost of IP. Meanwhile, Bluestar Bluestar won less than 50% of the joint venture.

The identity of Bebe Stores Inc. founder Manny Mashouf in the joint venture is not disclosed, but the domestic wholesale and international authorized business of Bebe Stores Inc. will be fully operated by the joint venture company.

With the entry into force of the agreement, Bebe Stores Inc. will have an impact on the licensing agreement of the Shanghai retail brand agent Langhao Holdings Limited in the end of August 2015.

However, even if entering China, its business prospects are not optimistic. The analysis shows that the brand recognition of Bebe Store Inc. in China and the location of products and retail are hard to find space in the fiercely competitive Chinese market. At present, China's economic slowdown and stock market turbulence also increase the risk of brand expansion.

Bluestar Alliance LLC is a new brand management company founded in 2016 by Joseph Gabbay and Ralph Gindi, of which Joseph Gabbay is CEO, the company is Brand CEO subsidiary company.

It is said that Bluestar Alliance LLC currently manages Kensie, Nanette Lepore, Catherine Malandrino, Michael Bastian, English Bastian, and the total brand sales of $1 billion 500 million, which currently has 200 authorized businesses worldwide.

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Bebe Stores Inc. group's net loss in the three quarter of fiscal 2016 increased from 29 million 970 thousand US dollars in the same period last year to US $29 million 970 thousand. The diluted share loss increased from 0.14 US dollars to 0.37 US dollars, and it has been in a loss for sixteenth consecutive quarters.

As of April 2nd, group cash and equivalents were only 27 million 900 thousand US dollars, a 42.4% decrease from 48 million 400 thousand US dollars in the same period last year.

The loss expanded year by year, sales continued to shrink significantly, and cash flow declined, which is the important reason for Bebe Stores Inc. group to sell some assets.

In addition, Bebe Stores Inc. has been under pressure from outside investors. In early March, hedge fund manager Michael Zimmerman two degrees sent a letter to the Bebe Stores Inc. board, accusing Bebe Stores Inc. of ignoring the interests of investors outside the controlling shareholder.

Michael Zimmerman said that during the past year, when Bebe Stores Inc. fell sharply, he and his fund had been trying to contact Bebe Stores Inc.'s board of directors and controlling shareholder Manny Mashouf, but none of them had received any response.

As of April 2, 2016, the net sales of Bebe Stores Inc. group decreased by 13.7% to 79 million 940 thousand US dollars a year, compared with 92 million 670 thousand US dollars in the same period last year.

Same store sales recorded a decrease of 8.1%, regardless of Bebe retail outlets or discount outlets, passenger and customer unit prices are declining, and international sales are also regressive.

The gross profit rate was 28.7%, down 170 basis points from 30.4% in the same period last year.

At the beginning of the year, Bebe Stores Inc., the group's founder, Manny Mashouf, pointed out that the group took the key restructuring measures including layoffs and end losses stores in the three quarter. In the current fourth quarter, the group will continue to streamline the production cycle, improve product categories and further integrate the store network strategy.

During the period, the group closed 12 Bebe stores and 2 discount stores. Currently, there are 1 stores and 2 stores in the fourth quarter, and 40 stores in fiscal year 2017.

The group now expects the same store sales in the four quarter to drop to a median high figure, with a diluted loss of 0.08-0.12 dollars per share.