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Bebe and Bluestar Alliance Form New Strategic JV

Bebe Stores

Bebe is working on a new global licensing model.

The contemporary women’s apparel company announced Tuesday that it received $35 million after it entered into a joint venture with brand management company Bluestar Alliance.

“The strategic decision to aggressively pursue a licensing strategy allows us to capitalize on the value of our brand in all categories and channels on a global scale. We have seen significant demand from prospective licensees and expect to generate long-term, committed royalties,” Bebe’s chief executive officer Manny Mashouf, said.

In compliance with the agreement, Bebe has contributed its related intellectual property and trademarks, receiving more than half of the joint venture. Bluestar contributed $35 million to Bebe and received just under 50 percent of the joint venture. Bluestar will take over Bebe’s current brand management organization to develop an international lifestyle licensing business for the joint venture.

“Bebe is an iconic contemporary women’s brand with a loyal customer base and growing international presence. We believe the company has significant long-term growth potential given its distinct market position, multiple channels of distribution and growing international brand awareness,” Bluestar CEO Joseph Gabbay said. “We see a tremendous opportunity to leverage our brand expertise and capitalize Bebe’s differentiated market position to build a global contemporary lifestyle brand.”

Bebe’s executive board decided that the joint venture with Bluestar would be best for the future of the company and shareholder relationships. Lately, many of Bebe’s shareholders, including Prentice Capital Management, have expressed concerns over conflicts of interests within the company’s executive board. Despite resolutions, many investors still are wary about financially backing up Bebe.

The joint venture with Bluestar will enhance Bebe’s global reputation among industry members and consumers. Although this is positive progress for Bebe, Mashouf spoke about how shareholders still remain an issue for the company. “Over decades we built one of the great global brands in the women’s fashion world. However, the value of our brand, its reach and potential is clearly not reflected in investors’ current perception of the company and its valuation,” he said.