Can You Bet On Bebe stores, inc. (NASDAQ:BEBE)’s Bet?


Bebe stores, inc. (NASDAQ:BEBE) has jumped onto a brand monetization train to try and turnaround its financial performance. But it is a bet that is worth looking at closely because it could be a transformational move.

What is happening?

At some point recently, Bebe stores, inc. (NASDAQ:BEBE) and Bluestar Alliance, a renowned brand management company, discussed and agreed to create a joint venture entity. The idea of the joint venture is to pave the way for BEBE to make money from licensing its brand to third-parties.

Under the agreement, BEBE owns just over 50% of the joint venture while Bluestar owns the rest.

$35 million contribution from Bluestar

To create the joint venture, Bebe stores, inc. (NASDAQ:BEBE) has contributed its trademarks and intellectual property and that is what gives it the majority stake in the joint business. On its part, Bluestar contributed $35 million to fund the activities of the joint venture.

Is anyone showing interest?

BEBE and Bluestar believe they are on the right track to achieving their goals under the joint venture business. In the short duration that they have put the joint venture together, several licensees have shown interest in what they are offering and some have even made firm commitments.

Some of the licensees that Bebe stores, inc. (NASDAQ:BEBE) and Bluestar have brought on board are Gbs USA, which has acquired license for sportswear, socks and denim. Mamiye Brothers, known for its children’s apparel, is also another licensee that the joint venture has snapped up.

Others licensee that have been signed by the joint venture are Miworld Accessories (travel accessories), Haskel Jewels (jewelry) Accutime Watch Corp (watches), PPI Apparel Group (intimate wear) and American Travel Inc (luggage).

The financial deals of those license agreements have not been revealed. But BEBE and its partner are hoping that the more they get more licensees on board and expand the footprint of the brand internationally, they will make more money.

Bebe stores, inc. (NASDAQ:BEBE) is under pressure to turnaround its business as management shakeup and job cuts have done little to stop money bleeding. The company posted a net loss of $27.67 million on revenue of $428 million in 2015. The net loss narrowed from $73.68 million in the prior year and revenue also expanded slightly from $426 million in the previous year.


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