It’s hitting the fan at Bebe
Steve’s breakdown: Executive shake-ups like this one do offer an opportunity. If you can save them some cash, you win a new account.
LOS ANELES, CA: Bebe stores has brought back its founder and former CEO to lead a turnaround effort that includes a 15% reduction in its corporate workforce.
The troubled retailer announced that founder Manny Mashouf has rejoined its management team as CEO, replacing Jim Wiggett, who was hired less than two years ago. Mashouf previously served as CEO from the company’s founding in 1976 to 2004, and then again from 2009 until the beginning of 2013, when he stepped down and became non-executive chairman.
In another change, Bebe said Walter Parks will return as president and COO and also act as interim CFO. Parks, who replaces CFO Liyuan Woo, previously served as the company’s COO from the end of 2006 to early 2013, and as CFO for 10 years, from 2003 to 2013.
The moves comes as Bebe embarks on a restructuring plan to help revive falling sales. The company has posted three consecutive years of losses; including a loss of $5.5 million for its most recent quarter. Same-store sales have fell in five of the past eight years.
As part of its turnaround effort, Bebe said it will eliminate 45 jobs across design, merchandising, production, and information technology support functions of the company, representing a 14.6% reduction in corporate headcount.
“We believe the changes we are implementing will enable us to become a leaner and more nimble organization, allowing us to increase our focus on profitability while enhancing our product offering,” Mashouf said. “We recognize that the overall macro environment has not been favorable to retailers in general, which is why we are taking steps that we believe are necessary to position the business for long-term success.”
As a result of its restructuring, Bebe expects to incur a one-time severance charge of approximately $3.7 million in the third fiscal quarter of 2016. The reductions are expected to yield annualized pre-tax cost savings of approximately $6.0 million.
Bebe currently operates 151 Bebe full-priced stores and 38 outlet stores in the United States, Puerto Rico and Canada, in addition to Bebe.com.