Bebe Stores to discontinue PH8 brand less than a year after launching it
Contemporary women’s apparel retailer Bebe Stores Inc. said Tuesday that it would discontinue operations of its unprofitable PH8 division, less than a year after launching the retail concept.
The Brisbane, Calif., company said its 48 PH8 stores, which sold “playfully sexy fashion-forward” active streetwear, would be closed or converted to its 2b bebe concept during fiscal 2011. Last July, Bebe announced that PH8 would replace its Bebe Sport stores.
Bebe said the move would allow the company to focus on improving sales and profitability. It estimated that it would incur pretax costs of about $17 million related to the closings and conversions.
Analysts said part of the problem was stiff competition in the women’s sportswear and streetwear market that made it difficult for PH8 to stand out from the crowd.
“PH8 finally meets its fate a little earlier than we thought,” said Christine Chen, a retail analyst at Needham & Co. “At this point, they’ve certainly tried and it isn’t working.”
Bebe, which operates 297 stores, many of them in malls, across several brands will report its fiscal-year and fourth-quarter earnings Aug. 26.
Also Tuesday, Bebe said it expected fiscal fourth-quarter comparable sales to be at the low end of its previous guidance range.
Shares of Bebe rose 35 cents, or 5.5%, to $6.68.
