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Bebe Moves to China as Sales Suffer at Home

China’s economic malaise doesn’t seem to be deterring brands from expanding their foothold in the country—Bebe Stores announced Thursday that it will open between 60 and 150 retail and wholesale distribution points in Greater China, Hong Kong, Macau and Taiwan.

Sales at the women’s fashion purveyor may be struggling at home, but Bebe is betting on success overseas.

“As we continue to expand our international footprint, our entrance into Greater China is a significant opportunity to accelerate that growth and reinforce bebe as a global lifestyle brand for women,” Bebe CEO Jim Wiggett said in a statement.

Under the five-year agreement with Shanghai-based brand agency Longgoal LLC, Longgoal will open at least 60 stores in Mainland China including free-standing Bebe boutiques, shop-in-shops and indentify third party retailers to sublicense the brand to for retail operations. Longgoal is already looking into locations in Shanghai and Beijing for potential flagship stores.

Bebe said it will design and develop as much as 30 percent of the product for the Chinese consumer right in China so that trends are right and reflect the local fashion and lifestyle.

Bebe chief financial officer Liyuan Woo said, “The bebe brand has resonated well in key international markets as women continue to look for a distinctive ageless and head turning style which suits their lifestyle needs, and we look forward to doing the same in Greater China over the coming years.”

Longgoal, which represents clients including sportswear brand Gant and luxe shirt brand Thomas Pink, said the Bebe brand will appeal to the “confident and sexy modern Chinese woman” and her ever-changing lifestyle.

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“Bebe is truly an iconic affordable luxury brand and one that we are honored to have the opportunity to introduce to women across Greater China in a variety of ways,” Longgoal chairwoman Celine Chen, said. “As style and design are among the top priorities for sophisticated woman in China, we are confident that bebe’s bold design and contemporary fashion will appeal to the ever-changing lifestyle of the confident and sexy modern Chinese woman.”

Beyond apparel, Bebe said it has plans to expand into licensing agreements for handbags, footwear and intimates at the outset of the partnership with Longgoal.

Wiggett wants to turn Bebe stores around by ramping up marketing spend, cutting back on club-going clothing and developing its multichannel strategy. The retailer even debuted a line of athleisure footwear to give the brand a boost.

In a separate statement released Thursday, Bebe reported a loss of $0.05 per share for the fourth quarter ended July 4, and a 0.7% increase in net sales to $104.3 million, though conditions for the coming quarter look bleak.

Bebe expects comparable store sales in the first quarter of fiscal 2016 to be in the negative mid-single digital range, gross margin will be lower than last year owed to higher markdowns to clear inventory from a design miss with its Bohemian collection, and the net per share loss will likely be in the high teens.

But Wiggett is so far pleased with Bebe’s progress on strategic initiatives and said the company has continued to see growth opportunities through increased store productivity and further development of its international, boutique, domestic wholesale and e-commerce businesses.

“Looking ahead, we are excited about our upcoming fall collections, and look forward to benefitting from a ramp up our marketing spend in August,” the CEO said.