Women’s clothing retailer Bebe Stores Inc. (BEBE.O) announced on Friday it will be closing down all of its stores by the end of May this year.  The announcement comes barely a month after the company announced it was exploring strategic alternatives for its business after 4 years of loses.

The struggling women’s brand is closing all traditional stores and transition to online model.

In February, the company announced plans to close up stores including outlet locations as well as liquidate all merchandise and fixtures. The company is in the midst of a reorganization.

The struggling clothing brand will be shutting down all of its 175 traditional, brick-and-mortar stores in a move that will see the company transition to an online model to avoid filing for bankruptcy.  Another of other retailers within the same category have gone bankrupt in the last 2 years because of stiff competition from e-commerce and online retailers including brands like Zara, H&M and Amazon.

Bebe like many other retailers is facing stiff competition from e-commerce giants like Amazon. Credit: Getty Images/Justin Sullivan

In closing all of its locations, Bebe said it expects to take an impairment charge of about $20 million (net of deferred rent and other credits) from the store closures in the third and fourth quarters of this year.

Shares of Bebe plunged more than 16% to a fresh 52-week low of $3.02 before reversing course to trade up nearly 6% in afternoon action. The stock has shed 26% of its market value so far this year, and 37% over the last year.

Bebe like Payless are facing stiff competition from e-commerce giants like Amazon and are shifting from brick-and-mortar stores to online. Credit: Flickr

The California-based clothing retailer known for its form-fitting dresses had 180 stores at the end of 2016.   Bebe Stores is not alone but is the latest in a string of liquidations and bankruptcies that have swept the struggling sector.  Payless ShoeSource will be closing early 4000 of its traditional physical stores after filing for bankruptcy protection, Ralph Lauren will close its flagship Polo store in New York while Walmart continues in a price war with Amazon and J.C. Penny.

The company has not said or revealed anything about its future plans.


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