Bebe to Close All Physical Stores

International fashion retailer Bebe says it will close all its bricks and mortar stores by May 2017 and it’s likely the brand will consider operating as an online-only model moving forward.

It’s interesting times of “digital versus in-store” where it’s becoming a choice of one or another for some retailers.

Two months ago troubled US based retailer Bebe said it would reduce its physical store base by 12% to focus more on its online operations, but now it looks like it will close all 175 stores in the first half of this year, according to a filing with the Securities and Exchange Commission (SEC) on Friday. The company’s stock fell by more than 4% on Friday morning before the news hit, but closed 6% higher by the end of the day.

Bebe was exploring different strategies for its struggling business, amid speculation it would transition to an online-only model. The womenswear brand had been struggling for a while, reporting second quarter decline in store sales of 10.5%, with inconsistent store traffic and inadequate numbers over the holiday periods as well. Declining US mall traffic has not helped either.

A growing number of retailers in the have been filing for bankruptcy, including Payless Shoes, who earlier this month said it would close its 400 stores to reorganise, with its online store down as well. Millennial-focused fast fashion retailers like Topshop, H&M and Zara, as well as growing competition from e-commerce giant Amazon, have played a role in this trend.

In February this year, Bebey had already begun the process of reducing its store base with plans to close 25 store outlets. The company will now begin closing all of its stores in the US, Puerto Rico and Canada. Bebe technically hasn’t filed for bankruptcy as yet, and although it hasn’t confirmed its future plans, it will likely consider shifting to an online-only model following its store closures.

According to the SEC filing, Bebe’s financial advisor, Great America Group, will sell all in-store merchandise and inventory as well as furnishings, trade fixtures and equipment.

Bebe was founded as a boutique in San Francisco in 1978 and launched its online store Bebe.com in 1998. The company has always had strong branding in the chic fashion space, however ever since the departure of creative director Neda Mahouf, who left after her divorce with founder Manny Mashouf, the company has never been the same and has been in slow decline since.

Ralph Lauren recently announced it would downgrade its physical stores by 10% and focus more on its online sales, with a number of other luxury retailers like Louis Vuitton and Valentino saying they are going to ramp up their online presence as well.

Follow Prinitha on Twitter @prinitha_g and Instagram @prinitha

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