Bebe Stores, Inc. (NASDAQ:BEBE) has received $35 million as part of a joint venture arrangement recently reached with Bluestar Alliance. According to CEO, Manny Mashouf, BEBE will own over 50% of the joint venture while Bluestar will own the rest, which is slightly less than 50% of the joint venture.
Bebe Stores, Inc. (NASDAQ:BEBE) said that its joint venture partner Bluestar was the one that contributed the $35 million toward the joint venture and the money has been paid to BEBE. On its part, BEBE said it would contribute its trademark as well as other IP rights to the joint venture.
What the business about?
The agreement calls for Bluestar to manage the day-to-day operations of the joint venture. Those operations will primarily be licensing lifestyle business rights at domestic and international levels. Bluestar has the management organization to run such business.
Monetization of the brand
The deal with Bluestar signals Bebe Stores, Inc. (NASDAQ :BEBE)’s strategy to start monetizing its brand. Company officials have repeatedly said that the value and the potential of the brand was something that their investors didn’t fully appreciate. As such, it appears that the joint venture will mark the beginning of an important journey of converting a legacy brand into a dollar-generating business.
Demand from licensees
Bebe Stores, Inc. (NASDAQ: BEBE)’s move to team up with Bluestar to create a licensing business appears to be designed to meet an already existing demand. According to BEBE’s CEO Mashouf, they have recently a significant spike in interest among businesses seeking to license the rights they own.
The licensing joint venture should pave the way for Bebe Stores to begin generating extra income through royalties.
Bebe Stores, Inc. (NASDAQ :BEBE) distinct market position
On its part, Bluestar believes that Bebe is an iconic brand in the women apparel business that enjoys a distinctive market position. That distinction should make it easy for the joint venture to penetrate the domestic and global lifestyle rights licensing business faster.