Research Desk Line-up: Chico's FAS Post Earnings Coverage
LONDON, UK / ACCESSWIRE / June 9, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Bebe Stores, Inc. (NASDAQ: BEBE). The Brisbane, California based Company announced on June 07, 2017, that it had reached an agreement with nearly all of its retail store landlords to terminate the existing leases. The entire cost of termination of leases is expected to be approximately $65 million. For immediate access to our complimentary reports, including today's coverage, register for free now at: http://protraderdaily.com/register/.
Discover more of our free reports coverage from other companies within the Apparel Stores industry. Pro-TD has currently selected Chico's FAS, Inc. (NYSE: CHS) for due-diligence and potential coverage as the Company announced on May 24, 2017, its financial results for Q1 FY17 which ended on April 29, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Chico's FAS when we publish it.
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The Reorganization plan
The Company also announced a series of decisions which will help in complete reorganization of its business. This would allow the Company to avoid filing for bankruptcy.
The Company also announced that it is selling its distribution center in Benicia, California for approximately $22 million and expects that the sale will be closed within the next 60 days. Bebe Stores is also looking for buyers for its Design Center in Los Angeles, California.
The Company has taken a loan of $35 million from GACP Finance CO, LLC, to make payments to the retail store landlords until it completes the sales of its real estate properties.
Bebe Stores has transferred both the bebe.com URL and International Wholesale agreements to its joint venture (JV) with Blue Star Alliance. Blue Star Alliance has in turn executed royalty agreements with third party for the Bebe.com website and international wholesale business.
The Company had also entered Transition Service Agreement (TSA) and Asset Purchase Agreement (APA) with a third party who provides sales of certain inventory as well as the management of the Company's website - bebe.com. This will help in the management of the Company's website as well as the wholesale businesses by the third party.
Bebe Stores does not plan to have any retail operations in the future. Its only activity will be the collection of royalty income from the JV.
In March 2017, Bebe Stores had announced that the Company is exploring strategic alternatives and had retained the services of financial advisor B. Riley & Co. to assist it in this matter. It had also retained the services of a real estate advisor to help the Company in matters relating to the various lease holdings. Following the announcement in April 2017, Bebe Stores announced its plan to close all its stores in nearly 180 locations and liquidate all inventory by the end of May 2017. The Company is expected to incur an impairment charge of approximately $20 million, net of deferred rent and other credits, as a result of closing the stores. The same will be reflected in the Company's Q3 and Q4 2017 earnings report. At the time industry sources had expected the Company to head towards filing of bankruptcy.
Retail industry has been facing rough weathers in the last few years due to decrease in mall traffic as well as increasing competition from online giants like Amazon. Within the last few months many retailers have filed for bankruptcy protection:
- In May 2017, teen fashion retailer Rue21 Inc. filed for Chapter 11 protection;
- In March 2017, fashion house BCBG Max Azria Group LLC filed for bankruptcy protection;
- In February 2017, teen apparel chain, The Wet Seal LLC filed for bankruptcy for a second time;
- In January 2017, women's apparel chain, The Limited filed for Chapter 11 bankruptcy protection with plans to sell its brand name and other assets.
Last Close Stock Review
On Thursday, June 08, 2017, the stock closed the trading session at $5.46, marginally down 0.91% from its previous closing price of $5.51. A total volume of 16.38 thousand shares have exchanged hands. Bebe stores' stock price advanced 4.00% in the last one month, 0.78% in the past six months, and 9.09% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 7.27%. The stock currently has a market cap of $41.99 million.
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SOURCE: Pro-Trader Daily