Struggling women's apparel retailer Bebe Stores Inc. (BEBE) will close all its stores by the end of May 2017.
In a filing with the Securities and Exchange Commission on Friday, Brisbane, California-based Bebe said it expects to incur an impairment charge of about $20 million as a result of the store closures.
The impairment charge will be recorded in the third and fourth quarters of fiscal 2017. However, the company has not disclosed what its future plans are.
The announcement comes just a month after Bebe said it is exploring strategic alternatives and has retained B. Riley & Co. as its financial advisor as well as hired a real estate advisor to help with options related to lease holdings.
Bebe said Friday it has entered into a consulting agreement with Great American Group, LLC, an affiliate of B. Riley & Co., and Tiger Capital Group, LLC to sell all merchandise and inventory in its existing retail stores, certain furnishings, trade fixtures, equipment and improvements to real property with respect to the stores.
Bebe noted that it might incur a loss in connection with this sale of its merchandise and inventory, but is unable to currently determine the loss.
Bebe will pay the consultants $550,000 and an additional fee of 15 percent of the gross proceeds generated from the sale of the furnishings, trade fixtures, equipment and improvements to real property.
In March, Bloomberg reported that Bebe is planning to shut its stores and seek a turnaround as an online brand. The company, with about 170 boutique and outlet stores, was trying to close the locations without filing for bankruptcy.
Bebe has no significant debt, but the retailer has lost about $200 million over the past four years.
Several apparel retailers have been struggling lately as traffic continues to drop with customers preferring fast-fashion apparel retailer such as H&M and Zara, or online shopping.
In early April, specialty family footwear retailer Payless Shoesource said it filed for Chapter 11 bankruptcy and will close nearly 400 stores in the U.S. and Puerto Rico.
by RTT Staff Writer
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