B. Riley to purchase 3.7 million shares of
bebe stores, inc. from founder Manny
Mashouf
B. Riley will own approximately 76% of the
outstanding shares of bebe common stock
LOS
ANGELES, Sept. 25, 2023 /PRNewswire/ -- B. Riley
Financial, Inc. (Nasdaq: RILY) ("B. Riley" or the "Company"), a
diversified financial services platform, today announced it has
signed an agreement to purchase 3.7 million shares of common stock
of bebe stores, inc. (OTCQB: BEBE) ("bebe") from trusts formed by
bebe founder, Manny Mashouf, at
$5.00 per share for a total purchase
price of $18.5 million. The closing
date of the transaction is expected to occur on September 30, subject to the satisfaction of
certain closing conditions.
Upon the closing of the transaction, B. Riley's total ownership
of bebe will be approximately 76% of the shares of common stock
outstanding. Mashouf, who plans to step down from his roles at bebe
in the near future, will continue to own approximately 4% of bebe's
outstanding shares of common stock.
"Manny is a fashion innovator and the vision behind bebe during
his 45-plus year tenure as Chairman and CEO. We greatly appreciate
his continued leadership since our involvement with the company in
2018," said Bryant Riley, Chairman
and Co-CEO of B. Riley Financial. "This is an opportune time
to increase our investment in bebe, and we expect that our expanded
involvement in bebe's operations will add value based on our
extensive experience in brand licensing and deep understanding of
the rent-to-own industry. We expect this transaction to be
accretive to B. Riley's EBITDA."
Riley added: "bebe's brand licensing investments have
generated approximately $11 million
per year in cash flow before corporate expenses to bebe over the
past three years. We highly value this business model because
royalties are historically stable and yield contractually obligated
minimum payments from licensees. In addition to the licensing
business, we believe that the Buddy's rent-to-own segment, which
contributed $8 million of EBITDA in
2021 but suffered from ensuing inflationary pressures in 2022 and
2023, will revert back to normalized operating profit of
approximately $6 million, before
corporate expenses, over time."
bebe was B. Riley's first brand licensing investment that
led to the formation of its expanded brand portfolio with equity
interests in Hurley, Justice, and Scotch and Soda, as well as
controlling interests in six other brands –
Catherine Malandrino, English
Laundry, Joan Vass, Nanette Lepore, Limited Too, and
Kensie.
Founded in 1976 by Manny Mashouf,
the bebe brand is best known for its contemporary women's clothing
and fashion accessories. In 2018, B. Riley assisted bebe in
connection with the fashion brand's strategic shift away from
brick-and-mortar retail to focus on e-commerce and brand licensing.
bebe also owns a joint venture interest in the Brookstone brand and
certain Buddy's Home Furnishings Rent-to-Own stores.
About B. Riley Financial
B. Riley Financial is a
diversified financial services platform that delivers tailored
solutions to meet the strategic, operational, and capital needs of
its clients and partners. B. Riley leverages cross-platform
expertise to provide clients with full service, collaborative
solutions at every stage of the business life cycle. Through its
affiliated subsidiaries, B. Riley provides end-to-end financial
services across investment banking, institutional brokerage,
private wealth and investment management, financial consulting,
corporate restructuring, operations management, risk and
compliance, due diligence, forensic accounting, litigation support,
appraisal and valuation, auction, and liquidation services. B.
Riley opportunistically invests to benefit its shareholders, and
certain affiliates originate and underwrite senior secured loans
for asset-rich companies. B. Riley refers to B. Riley Financial,
Inc. and/or one or more of its subsidiaries or affiliates. For more
information, please visit www.brileyfin.com.
Forward-Looking Statements
Statements in this press
release that are not descriptions of historical facts are
forward-looking statements that are based on management's current
expectations and assumptions and are subject to risks and
uncertainties. If such risks or uncertainties materialize or such
assumptions prove incorrect, our business, operating results,
financial condition, and stock price could be materially negatively
affected. You should not place undue reliance on such
forward-looking statements, which are based on the information
currently available to us and speak only as of the date of this
press release. Such forward-looking statements include, but are not
limited to, statements regarding bebe's cash flows, royalties
and expected earnings. Factors that could cause such actual
results to differ materially from those contemplated or implied by
such forward-looking statements include, without limitation, the
risks described from time to time in B. Riley Financial, Inc.'s
periodic filings with the SEC, including, without limitation, the
risks described in B. Riley Financial, Inc.'s 2022 Annual Report on
Form 10-K under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" (as applicable) and in our Quarterly Reports on Form
10-Q for the quarters ended March 31,
2023 and June 30, 2023. These
factors should be considered carefully, and readers are cautioned
not to place undue reliance on such forward-looking statements. All
information is current as of the date this press release is issued,
and B. Riley Financial undertakes no duty to update this
information.
Contacts:
Investors
Mike Frank
ir@brileyfin.com
(212) 409-2424
Media
Jo Anne McCusker
jmccusker@brileyfin.com
(646) 885-5425
View original content to download
multimedia:https://www.prnewswire.com/news-releases/b-riley-financial-increases-investment-in-bebe-301937930.html
SOURCE B. Riley Financial