Brisbane, Fla. Bebe Stores said it will discontinue operations of its struggling, workout apparel-oriented PH8 division as the company focuses its efforts on improving operations at its namesake Bebe division and developing its 2b Bebe outlet-store concept. Some of the existing 48 PH8 locations could be converted to 2b Bebe.
The company estimates the total pre-tax cost associated with closing or converting its 48 PH8 stores will be approximately $17 million. This $17 million includes an estimated $2 million related to the write-off of the net book value of the stores’ assets and up to $1 million to mark down inventory to the lower of cost or market; both non-cash charges will be recorded in the fourth quarter of fiscal 2010.
Bebe will begin to close or convert the PH8 stores during the first fiscal quarter of 2011.
The retailer currently operates 297 stores, of which 213 are Bebe stores, 48 are PH8 stores, 35 are 2b Bebe stores and 1 is a Bebe accessories store.