‘Tis the season for layoffs.
Bebe Stores on Wednesday announced plans to eliminate more than 50 positions, primarily in design, merchandising and production, as part of the women’s retailer’s efforts to streamline its lifestyle assortments and improve efficiency across the business.
The Brisbane, California-based company expects pre-tax costs associated with the reorganization to be about $1.5 million but anticipates annual savings of $4.8 million.
In addition, Bebe Founder and Chairman Manny Mashouf will start working closely with the remaining members of the design and merchandise teams and a $5 million share-repurchase program has been approved by the board.
“We believe this will position us to maintain a more consistent and better edited offering of fashion that is true to the Bebe brand,” Jim Wiggett, chief executive officer, said in a statement, noting that he believed the layoffs to be “in the best long-term interest of the company.”
Wiggett, who took the helm last December after acting as interm chief executive for six months, has focused on cleaning up Bebe’s party-girl act and offering a greater assortment of lifestyle options.
Mashouf commented, “I look forward to collaborating with the teams to create great, innovative, branded product that speaks to the needs of the Bebe woman.”
The company also announced that it is maintaining its first-quarter guidance of fiscal 2016. Comp-store sales are expected to be in the negative mid-single digit range, while gross margin is estimated to be lower than last year.
“We have seen encouraging trends in the business quarter-to-date. Comparable store sales in September turned positive and we have largely moved through our underperforming bohemian product,” Wiggett concluded, adding, “As we prepare for second half of fiscal 2016, we will continue to evaluate our cost structure and capital expenditure requirements.”
Earlier this week, Neiman Marcus announced it was letting 500 of its 16,000-member workforce go, while Walmart said it was eliminating as many as 500 people from its Bentonville, Arkansas-based headquarters.