Bebe Stores, the embattled clothing retailer, is gearing up to shutter all of its stores by the end of May.
According to a report in Reuters, Bebe had 180 stores at the end of last year. The move comes just a little over a month after saying it was exploring strategic alternatives. In addition to closing its stores, the retailer said it was liquidating all merchandise and fixtures within the stores. In an interview with Reuters, Joel Levitin, a partner-in-law at firm Cahill Gordon & Reindel’s bankruptcy and restructuring practice, said Bebe may consider a bankruptcy filing to settle with its landlords of the stores. Bebe said in its annual report that was filed with the Securities and Exchange Commission that all of its stores are leased.
“If the landlords don’t deal with them at all or if they are not able to come to a satisfactory solution, then they may need bankruptcy to reduce the amount of damage claims,” Levitin said in the Reuters report.
Bebe is the latest in a number of apparel retailers to struggle under the might of Amazon.com and online commerce. Reuters pointed out that in the last couple of years a handful of retailers have gone bankrupt, including Aeropostale and The Limited. Industry experts told Reuters more retailers are likely to file for bankruptcy in 2017.
In the filing, Bebe said it expects a roughly $20 million impairment charge from shuttering the stores, which will show up in the third quarter. Bebe said it will also pay advisers B. Riley & Co and Tiger Capital Group $550,000 and 15 percent of the gross proceeds from the sale of store fixtures.