Joanna Thommée

bebe Brand Conceptsatisfy the fashion needs of modern, sexy and sophisticated women

Bebe woman: not defined by her look, but by her attitude: assertive, sexy, stylish, confident & cutting edge

design, develop and produce a distinctive line of contemporary women's apparel and accessories

signature look: hip, sophisticated, body conscious fashion

bebe Culture & Roots

“To be or not to be” Hamlet’s quote which inspired store nameVisionary

At time of launch 3 categories of women’s clothing dominated the market: junior, bridge & missy

bebe tapped into unexploited demographic of women by offering stylish, inspirational & sexy clothes

Visionary

bebe: Brand ID

Physical

Relationship

Reflection

Personality

Culture

Self Image

Physicalbebe logoBody conscious designsWomen’s ready to wear apparel

Relationship

SexyFeminineExhibitionist

ModernInnovativeFashion forward

Reflection

bebe: Brand ID

Physical

Relationship

Reflection

Personality

Culture

Self Image

PersonalitySexyEdgyConfident

Culture

FierceSexyConfidentSocially Elevated

CalifornianProvocativeSelf ExpressionYouthfulPorno Chic

Self Image

bebe: brand architecture

Branded House with sub-Brands

bebe• 1st store in 1976•Women’s ready to wear apparel•211 bebe locations & 1 bebe accessory store •Average 4,000 square feet •Primarily located in regional shopping malls & freestanding street locations

•Launched 2003 •Sportswear/footwear under BEBE SPORT & bbsp brand names•62 locations averaging 2,500 square feet •Primarily located in regional shopping malls•2009 BEBE SPORT converting to PH8

BEBE SPORT (PH8)

2b bebe•Launched 1997, now 34 locations•Sell bebe logo, 2b bebe merchandise & bebe retail markdowns •Average 4,530 square feet •Primarily located in outlet malls

bebe.com•Extension of bebe store experience •Complete bebe & BEBE SPORT collection •Communication vehicle

bebe: Target Consumer

• 18 to 34-year-old woman seeking current fashion trends

• Hip, sexy, sophisticated, body-conscious woman who takes pride in her appearance

• Appreciates current fashion & high quality at a competitive price

Bebe: Competitive Environment

Brand Name Recognition

Product styling

Product quality

Product presentation

Product pricing

Store ambiance

Customer service

Convenience

Primary Competitive Factors

Retail & apparel industries: highly competitive due to low barriers to entry

Womenswear accounts for 47.5% of global apparel, accessories & luxury goods market's value

Global apparel, accessories & luxury goods market shrank by 6.6% in 2008 to $1,334.1 billion

In 2013, Global apparel, accessories and luxury goods market is forecast to have an increase of 42.7% since 2008

Bebe: Competitive EnvironmentLuxury

Conservative Sexy

Mass

Victoria Secret

Dior

Guess?

bebeClub Monaco

Anne TaylorBanana Republic

XOXO

Polo Ralph Lauren

Tommy HilfigerChanel

Jones Apparel

Gap

Old Navy

Urban OutfittersBabyPhat

Nordstrom

American Apparel

Bebe: Short History

1976• Founder Manny

Mashouf (current chairman & CEO ) opens 1st boutique in San Francisco

1997• Opened 1st 2b

bebe (bebe outlet store)

1998• Went public &

launched www.bebe.com online store

2003• Launch of BEBE SPORT

2009• All BEBE SPORT

stores & merchandise converting to PH8

One of the top women’s retailers developing the contemporary market for the masses

Bebe: collaborations

Purchase & download individual songs/whole album from bebe website

Madonna’s “Greatest Hits” compilationWhat?

Why?

Positive Brand Association: Madonna is a fashion/music icon known for her confident, edgy & sexy style

Bebe: collaborations

Dec 2008: partnered with Pussycat Dolls creator Robin Antin to launch ‘Pussycat Dolls Shhh…’ lingerie line available @select bebe stores & bebe.com.

Pussycat Dolls Shhh…

What?

Why?

Brand Extension & PR: created buzz while launching new product line designed by hip band that emanates brand values

Bebe: collaborations

Fall 2009: debut jewellery line created exclusively for bebeKeepsake bracelet sold at select bebe stores & bebe.com will donate 25% of proceeds to Richie-Madden Children’s Foundation

Nicole Richie for bebeWhat?

Why?

Positive Brand Association, PR & CSR

bebe: Special Services

Bebe iPhone & iPod Touch application

users can search, browse & purchase products on bebe.com

What?

How?

Why?

• Great Brand Association• Attracts younger target market• Increases “foot traffic” on bebe.com

bebe: Special Services

Virtual Bebe

Opened Virtual World shop on THERE.com

What?

How?

Why?

• Creates buzz• Attracts younger target market• Increases “foot traffic” on bebe.com

bebe: Special Services

beTXTED

Users text “VIP” for exclusive offers & promotions sent to their mobile phones

What?

How?

Why?

• Creates buzz• Attracts younger target market• May generate spontaneous purchases

bebe: Special Services

Clubbebe

•1 point per $1•$10 bonus with every 250 points •Double points events •Exclusive in-store events

What?

How?

Why?

• Strengthens customer loyalty• May generate spontaneous purchases

bebe: mass market price comparison

bebe Gap Urban Outfitters

Victoria’s Secret

Jacket $259 $148 $298 $218

Dress $139 $59 $78 $88

Pants $119 $69 $58 $69

Sweater $69 $45 $78 $48

bebe: luxury market price comparison

bebe Anne Klein Guess? Inc. Tommy Hilfiger

Jacket $259 $650 $320 $675

Dress $139 $350 $130 $299

Pants $119 $195 $185 $179

Sweater $69 $140 $95 $194

bebe: charity & CSR

bebe discontinued buying products with animal fur starting January 2008

beGreen initiative: making bebe a greener company• Produce 1/3 products in California decreases greenhouse gasses associated with transport• Use of 100% recyclable boxes & materials, etc.

bebe: charity & CSR

AIDS Walk (San Francisco, Los Angeles, New York):• 14th years of support • Raised over $264K

since 2006

Leukemia & Lymphoma Society Team in Training

2008

Regional Food Banks• Los Angeles & San

Francisco

bebe: charity & CSR

MAVI Foundation (Puerto Rico)• Helping disabled youth

Bebe’s Season of Giving 2008 Campaign (Puerto Rico)• Helping various charities

bebe: charity & CSR

Susan G Komen for the Cure (Los Angeles)• donated $48K in

2008

Dress for Success• donated over 3000

articles of clothing in 2008

Breast Cancer Research• Special Edition

clothing & accessories

bebe: advertising channels

• Use: print, outdoor, in-store, direct mail & e-mail

Edgy, high-impact, visual advertising campaigns

• Line of merchandise branded with distinctive bebe logo to increase brand awareness

Attract customers by playfully sensual & evocative imagery of bebe lifestyle

GOAL: maintain focus on core customers while elevating brand to "attainable luxury" status

• Runway collections since 2006

bebe: faces

Rebecca Romijn new face of bebe launching for Summer 2007

Mischa Barton new face of bebe beginning Summer 2006

Eva Longoria new face of BEBE SPORT launching for Spring/Summer 07

bebe: website

• Source of testing new concepts• Building client community • Providing comprehensive product offering• ships to: US, Canada, Puerto Rico &U.S. Protectorates

bebe.com

rewards patron who refer shoppers from their website to bebe.com for every purchase made by their referral

bebe Affiliate program

bebe: licensing agreements

August 2007• Skechers Footwear to

produce entire BEBE SPORT/bbsp footwear products & distribute to bebe stores & other stores worldwide

• began selling 2008

2007• Safilo Eyewear to

develop, market & sell sunglasses in bebe stores & Solstice owned stores

• first sunglasses sold 2007

July 2008• Inter Parfums, Inc. to

design, develop, manufacture, distribute, advertise &promote fragrance & color products

• available in 2009

August 2009• Titan Industries to

design, manufacture & distribute women's non-casual footwear

• In stores Spring 2010

Eyewear license agreement for optical eyewear• represents less

than 1% of business in 2009

• expires on June 30, 2010

bebe: International Distribution Business Model

Wholly owned stores

Do not sell @ wholesale

US, Canada, Puerto Rico, & US Virgin Island

bebe: International Distribution Business Model

South East Asia, United Arab Emirates, Israel, Russia, Mexico & Turkey

33 Licensed Stores

In fiscal 2010, plan to expand from 33 to 54 licensee operated stores including Oman, Qatar, Bahrain, China & Hong Kong

bebe: Store ConceptUpscale, visually stimulating boutique environment enhances bebe brand,

builds customer loyalty & online shopping experience

Market products under brand names:

bebe BEBE SPORT bbsp 2b bebe

Through:

308 retail stores www.bebe.com

33 international licensee operated

stores

bebe: MerchandisingStrategy

Provide current, timely fashions in a broad selection of categories to suit the lifestyle needs of customers

in-house design team

Quickly reacts to fashion trends, bringing newness into the merchandise mix to complement core assortment

Control distribution of merchandise

Enables price control, flow of goods, visual presentation & customer experience

bebe: Events

clients preview latest collections at bebe stores

Semi annual collection preview events

partners with national and regional magazines to host events benefiting non-profit organizations

Host events benefiting non-profit organizations

bebe: Key Success Factors Exclusive distribution

Convenient locations

Brand name recognition

Competitive product pricing

Strong international distribution model

Strong brand values & brand positioning

Presence in most profitable product categories

bebe: Measurement of Success

2005 2006 2007 2008 2009$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

Financials

Net Sales Gross Margin Income from Operations Net Income

bebe: Measurement of Success

Cost of goods sold/Net Sales

2005 2006 2007 2008 2009

0.503526 0.5052765 0.520329 0.541299 0.596694

Cost of goods sold has an upward trend, rising much faster in the last 3 years. bebe must either raise

prices or change suppliers to remain financially healthy!

bebe: Measurement of Success

2005 2006 2007 2008 2009$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

Debt Total Assets Working Capital

bebe: Measurement of Success

2005 2006 2007 2008 2009$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

Dividend Declared

Dividend Declared

Div

iden

d A

mou

nt

bebe: Measurements of Success

bebe: Measurements of Success

Based on current retail environment, there is limited opportunity to expand the number of bebe, BEBE SPORT (PH8), & 2b bebe stores in new and existing markets

Fiscal 2010 Plans•open 6 new stores•relocate & expand 1 existing store•close up to 13 stores, resulting in net square footage reduction of approx 1%

bebe: Measurements of Success

bebe stores Fiscal 2010 Plans•open 6 bebe stores•no new accessory only stores

Fiscal 2009 • opened 6 & closed 6 • relocated 1 existing bebe store to a larger space• converted 1 bebe store to a 2b bebe store

Store Closures Fiscal 2009: closed 8 storesFiscal 2010: plan to close up to 13 stores

BEBE SPORT storesFiscal 2009• opened 1 & closed 2 •expanded 1 existing store to a larger space

2b bebe storesFiscal 2009 •opened 6•converted 1 bebe store to 2b bebe store•converted all of existing outlet stores to new name, 2b bebe

Fiscal 2010 Plans• no changes to 2b bebe stores

bebe: Appraisal of Brand Equity Creation

• seems quite weak in 2008 & 2009 as profits plummet; however it has no long term debt

Financially intriguing

• due to consistent communication to consumers

Strong brand recognition

• Strategic locations & good use of international franchising

Leveraging Knowledge

bebe: Appraisal of Brand Equity Creation

Strengths Weaknesses Comprehensive product line offering in

women's apparel and accessories

Diversified format and geographical presence

Strong branding and CRM initiatives

Declining comparable store sales

Legal proceedings

Opportunities Threats Store expansion in domestic market

Increase in online retail sales

IS&T strategic plan to increase process efficiency

Declining consumer confidence

Counterfeit goods

Increasing labour rates impact profitability

Intense competition

THANK YOU!