Bebe and Brookstone, two retailers whose brick-and-mortar operations suffered amid the regression of the American mall, have sought new life from a joint venture with private equity firm and brand manager Bluestar Alliance.
Bebe, a contemporary women’s lifestyle brand that formerly operated physical stores before closing all but one of its New York City locations last year, has been in partnership with Bluestar since June 2016 when the firm purchased a minority stake in Bebe for $35 million. The retailer maintained majority ownership in exchange for its related intellectual property and trademarks after narrowly avoiding bankruptcy in 2017.
In an effort to expand the partnership and grow its portfolio, Bebe and Bluestar last month acquired the Brookstone brand and its related assets.
“Brookstone is a unique brand with strong growth potential,” Manny Mashouf, CEO of Bebe stores said in a statement announcing the acquisition. “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.”
Once dear in the hearts of mall-goers for being one of the few stores that would allow you to sit in a massage chair for free, Brookstone had fallen on hard times recently. In August, the purveyor of a menagerie of home, entertainment and travel goods tweeted that it would be closing of all of its 101 mall locations. The same day, Brookstone announced it would be filing for Chapter 11 bankruptcy.
Brookstone said it would continue to operate its 30 airport locations, saving 350 jobs, along with continuing to sell its products wholesale and through its website. However, after the acquisition, Apex Digital will take over Brookstone’s airport locations, as well as all e-commerce functions.
“Apex Digital is a great partner to run the Brookstone website and airport stores,” Ralph Gindi, COO of Bluestar Alliance LLC, said. “Apex is a major player in the consumer electronics market, developing advanced products and distributing them to the largest U.S. retailers, including Microsoft retail, Costco and Staples.”
The Bebe and Bluestar partnership ultimately aims to expand the Brookstone brand to wholesale distribution through other retailers around the world, “renewing Brookstone’s innovation and its flow of new products to the market,” according to Bluestar CEO Joseph Gabbay, who said London Luxury, known for its influence in the bedding, home textile and memory foam categories, is the brand’s first new licensee.
The acquisition is just the latest for Bluestar, which currently maintains a portfolio of 250-plus licensees, including Tahari, Bebe, Kensie, Catherine Malandrino, Nanette Lepore, Joan Vass, Michael Bastian, English Laundry and Limited Too, and operates more than 100 stores globally. According to figures provided by Bluestar, its annual retail sales exceed $2.5 billion.