Bebe Stores signs agreement with store landlords to terminate leases
Womenswear retailer Bebe Stores has reached an agreement to end the existing leases with most of its retail store landlords.
The cost to end the leases is estimated to be around $65m.
The company has also signed a $22m agreement to sell its distribution centre in Benicia, California. It also plans to sell its design centre in Los Angeles.
The company expects closure of the sale of the Benicia facility in the next two months.
It has signed a $35m loan agreement with GACP Finance CO to make payments to the landlords, pending the closure of the building sales.
The firm has also transferred both the bebe.com URL and international wholesale licenses into its joint venture with Blue Star Alliance.
This JV has implemented a royalty agreement with a third party for both the URL and wholesale licenses.
Bebe Stores has also signed a transition service agreement (TSA) and asset purchase agreement (APA) with the third party that provides for the sales of some inventory and bebe.com site management. These deals will facilitate the operation of the company's online and wholesale businesses to the third party.
In future, the company expects not to have retail operations, and its sole operations will be to collect royalty income from the JV.
The company was advised by B. Riley & co.