Bebe Stores Inc. (BEBE)

[BeeDoubleU]

bebe stores, inc. and Bluestar Alliance LLC Announce Strategic Joint Venture to Drive Execution of Global Licensing Model

Source: Business Wire
Brand Management Partner Funds $35 Million Investment in Joint Venture

bebe stores, inc. (Nasdaq:BEBE), today announced that it has entered into a joint venture with Bluestar Alliance LLC (“Bluestar”) and has received $35 million in connection with the formation of the joint venture.

Manny Mashouf, founder, Chairman of the Board and Chief Executive Officer of bebe, stated, “Over decades we built one of the great global brands in the women’s fashion world. However, the value of our brand, its reach and potential is clearly not reflected in investors’ current perception of the Company and its valuation.” Mashouf further stated, “The strategic decision to aggressively pursue a licensing strategy allows us to capitalize on the value of our brand in all categories and channels on a global scale. We have seen significant demand from prospective licensees and expect to generate long-term, committed royalties.”

Under the terms of the agreement, bebe has contributed its trademarks and related intellectual property to a newly formed joint venture and has received just over 50% of the joint venture. Bluestar has contributed the $35 million to the newly formed joint venture that was then paid to bebe and has received just under 50% of the joint venture. Bluestar will leverage its existing brand management organization and infrastructure to develop a wholesale domestic and international lifestyle licensing business for the joint venture and will manage its day-to-day operations.

Joseph Gabbay, Chief Executive Officer of Bluestar, commented, “bebe is an iconic contemporary women’s brand with a loyal customer base and growing international presence. We believe the Company has significant long-term growth potential given its distinct market position, multiple channels of distribution and growing international brand awareness. We see a tremendous opportunity to leverage our brand expertise and capitalize bebe’s differentiated market position to build a global contemporary lifestyle brand.”

Manny Mashouf further noted, “Following a thorough evaluation of our business, the board unanimously agreed that the transaction with Bluestar is in the best interest of our company and shareholders. I am proud of the legacy brand we created over the last 40 years, and I believe that the partnership with Bluestar allows bebe to leverage our brand equity.”

Guggenheim Securities, LLC is serving as financial advisor and Latham & Watkins LLP is serving as legal counsel to bebe. Blank Rome LLP is serving as legal counsel to Bluestar.