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Global Brands Touts Licensing Model, Relaunches Bebe Online

Licensing, not ownership, is the way to go for Global Brands Group, which achieved growth in all business units—kids, women’s and men’s, footwear and accessories and brand management—in FY17.

The apparel company, which continues to extend its portfolio, reported an 11.6 percent growth in revenue to $3.9 billion for the full fiscal year, ended March 31st. The company says its on track to hit $5 billion in revenue by March 31, 2020.

Global Brands’ positioning allows it to lessen its exposure by operating multiple brands. And there are no shortage of potential options out there given the parade of private equity firms snapping up apparel businesses and then looking for someone to run them, according to Bruce Rockowitz, chief executive officer and vice chairman of Global Brands Group.

“A large licensed portfolio is very important in this market. Ownership is very difficult. Our model is set up for multiple distribution platform. It’s a diversified brand portfolio that plays in all distribution level,” Rockowitz said on the company’s investor call, adding it’s an approach that has helped his company defy the current retail realities. “If you’re diversified and take a brand across multiple levels and globally, you could be doing very well in this market.”

The company, which has historically been in the kids’ business, boosted its men’s and women’s fashion sector by 31.5 percent to $820 million in revenue based on the addition of new brands. Yesterday, the company announced it will partner with Bebe Stores to relaunch its web presence and its international stores. Global Brands, which had been a licensee for the company, has also appointed Nathan Jenden, formerly of Diane von Furstenberg, as creative director. Sandra Campos, the newly appointed president of the Bebe division, called the brand “iconic” with a loyal fan base.

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Bebe was forced to close all stores in April after struggling to compete against fast fashion chains for fickle consumer favor. The retailer, known for its body conscious dresses, tried to pivot its merchandise to court the athleisure crowd. Ultimately, it was able to skirt the bankruptcy fate that has befallen peers like Wet Seal, Rue 21 and The Limited.

Global Brands recently entered into an agreement with Marquee Brands to purchase BCBG, which filed for bankruptcy protection in March. Global Brands is planning to buy the inventory, and if the deal closes as expected in July, it will operate the new business, while Marquee takes the IP.

“BCBG is a very strong brand in the market that had a lot of issues with too many stores and too big an overhead. It’s a $400 to $500 million business today,” Rockowitz said. “We will take a lot less stores. The overhead will take $100 million less, so it’ll be very profitable. You’re talking about $300 million plus business.”

Global Brands expanded its footwear offerings in April with the purchase of the Frye brand, through a deal with Authentic Brands Group. Footwear and accessories is a $1.3 billion business for the company, which saw a 5.6 percent increase for the year.