Bebe’s Boho looks failed to score in AW15

What’s gone wrong at Bebe? Quite a lot actually as it looks like product missteps, too many stores, markdown fever and a reorganisation process all combined in Q1 to make its results statement grim reading.

The fashion retailer said Thursday that Q1 comps fell 4.1%, total sales fell 5.7% to $96.3m, the gross margin fell significantly and the loss from continuing ops widened to $17.1m from $8.9m. Oh, and it’s also planning to cut North American stores with up to 30 to close this financial year.

Ouch! All the pain came after the company had launched a major ad campaign for the new season starring supermodel Irina Shayk. Not that it seemed to help.

Over to CEO Jim Wiggett: “Our performance reflects the continuation of a challenging retail environment in addition to soft sell-through in our Boho Collection. This led to an increase in our promotional activity as well as higher markdowns resulting in reduced gross margin. While sales trends briefly turned positive in September, driven by markdown merchandise and positive response to the fall collection, we saw a downturn in comps as a result of poor product acceptance coupled with inventory cancellations for October deliveries as we shift our product focus.”

As previously announced, the company has reorganised its design and merchandising organisations into product teams, which it believes will strengthen its focus on collections. Its founder/chairman has also taken a more active role in the company with a specific focus on product.

So will Q2 be any better? Not really. The company expects comps to stay negative, the gross margin to be down again and another loss.

The AW15 Bebe campaign

Bebe’s Holiday 2015 Soiree de Luxe campaign