Bebe's Closing its PH8 Stores -- Just Not Fast Enough
Just about a year after Bebe (BEBE) announced that a new concept PH8 (pronounced "fate") would replace its Bebe Sport stores than the company's decided to give it the axe -â€" and to take another year to do it.
The problem is not that the women's clothing chain best known for peddling sexpot styles is going to close or convert the 48 unsuccessful PH8 stores by the end of 2011. Rather it's CEO Manny Mashouf's hesitance to yank that bandage off swiftly. Hemming and hawing is only going frustrate the customers Bebe's already alienated.
That started when Bebe decided to phase out the Sport concept and swap it for a "playfully sexy fashion-forward active street wear and performance product." Launching with this vague premise was bad enough, but the retailer's press release made it sound as though no one in corporate really knew what they wanted.
Mashouf's attempt to define the new brand's assortment was followed up with this gem from Tara Poseley, the new president of PH8:
Savvier women are looking for clothes they can wear everyday 'on-the-go' whether to a yoga class, grabbing a coffee with friends or attending school activities with their children -- clothes that are fashionably chic, modern and easy to dress up or down.
So Bebe went from the gym to the carpool and back again? Oh, and the company emphasized that it would eschew logos because they just weren't cool to flaunt any more.
Unfortunately, this new concept didn't resonate with anyone. Haters were quite vocal about the shift in design from sparkly and colorful to drab. And one (former) loyal customer chastising the company on a blog pointed out a big brand equity killer:
I think that this new PH8 concept is very disappointing. Bebe is a brand, and bebe should be proud of its name and logo. Who is going to affiliate this boring named PH8 brand with fashion-forward Bebe? And I don't agree that people are less about logos.
At this point, with losses mounting at a double-digit pace -- sales were down 12.5 percent, and comps decreased 11.2 percent for the fiscal 2010 third quarter -â€" the only thing smarter than pulling the plug on a failure would be to take a page from the American Eagle Outfitter's (AEO) playbook.
Not even six months after taking a $44 million hit on its struggling Martin + Osa brand, the teen retailer, which owns nearly 950 stores and ships to 75 countries, cut the brand loose with plans to cease operations by the end of its second quarter.
Mashouf needs to follow suit if for no other reason than to shore up Bebe's reserves for the day when Kim Kardashian (and her Bebe branded jewelry line) takes him to the cleaners.
Image via Bebe.com
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