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Bebe’s Turnaround Plan Includes Less Merchandise, More Outlets

Bebe is in the midst of a makeover that CEO Jim Wiggett hopes will help the women’s retailer, once a bastion of bandage dresses and bodysuits, strike a balance between work and play.

Wiggett, who took the reins in December after acting as interim chief executive for six months, is doing his best to rid Bebe of its reputation for selling skimpy outfits and overtly sexual attire at deeply discounted prices, while still retaining a thread of the body-conscious image that made the 40-year-old brand a household name in the ’80s and ’90s, back when it used to gross $100 million to $150 million in sales.

“The good news is there was a history to go,” Wiggett told CNBC. “The good news is we did know our client… Where our future [lies] is to be very clear about our swim lane and then stay in it.”

The management team has been bullish on revamping its stores and merchandise and cutting down on costs, collections and discounts: 55 locations closed over the past three years, including all 18 of its lower-priced 2b stores; it now offers eight seasons a year instead of 12; and its club-rat appearance has been swapped out for a variety of wardrobe options suitable for work, special occasions and parties.

“What I want is that [former] customer to go, ‘Wow, I forgot about Bebe,’” he said, “because I want her to then come into the boutique.”

So far, so good for the Brisbane, California-based business: It’s posted three successive quarters of same-store sales gains and experienced an increase in both sales per square foot and margin performance at its 165 full-price locations. (Comparatively, the company reported a loss of $77.4 million for the fiscal year ended June 30, 2013.) Furthermore, it’s well on the way to cutting $20 million in costs for 2015 and 2015, Wiggett revealed.

Next up, Bebe wants to increase its international presence to include China, Brazil and Latin America (the retailer’s products are currently sold in 25 countries), as well as up its outlet store count to 70 over the next few years. A wholesale partnership with a yet-to-be-announced retailer is also in the cards.