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MERRIMACK, NH: Call it a pairing of strange bedfellows.
Bebe announced on Monday that it has partnered with brand management company Bluestar Alliance to acquire the Brookstone brand and related assets.
The company said the transaction will expand the wholesale distribution of Brookstone products to some of the largest retailers in America and across the world. Bluestar Alliance’s partner, consumer electronics company Apex Digital, will operate Brookstone’s e-commerce business, Brookstone’s airport stores.
Bebe and Bluestar have successfully worked together since 2016, when the company acquired an interest in the apparel retailer’s brand, trademarks, and intellectual property. Apex Digital also manages Bebe Stores’ digital assets. (Bebe closed all its retail stores in spring 2017 but did not file for bankruptcy. It transferred its intellectual property rights, including licensing revenue and its website, to BB Brand Holdings LLC, an operating subsidiary that is 50% owned by Bluestar Alliance. In June 2018, Bebe opened its first store, in Manhattan, under its new operating structure.)
“Brookstone is a unique brand with strong growth potential,” stated Manny Mashouf, CEO of Bebe Stores.
“We are pleased to expand our already-successful relationship with Bluestar and can see the potential synergies with other brands in their portfolio,” he added. “This investment, a direct result of our partnership with B. Riley Financial, which sourced the deal, will create a strong platform for future growth and enhance our ability to generate free cash flow to maximize our dividends to shareholders.”
Brookstone filed for Chapter 11 bankruptcy protection in August, listing assets of $50 million to $100 million and liabilities of $100 million to $500 million. While the 45-year-old company closed its remaining 101 mall stores, it continued to operate its airport stores, e-commerce and wholesale businesses as it looked for a seller.
However, this was the specialty gift retailer’s second round of bankruptcy. The retailer first filed for bankruptcy protection in 2014, and was subsequently was sold at an auction to a group of Chinese buyers backed by retailing conglomerate Sanpower Group and Hong Kong-based private-equity firm Sailing Capital before emerging from bankruptcy protection.
Brookstone blamed deteriorating mall traffic, supply chain issues, technical problems and management turnover for its recent problems.