bebe Brand Concept

satisfy 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
Hamlets quote which inspired store name Visionary

Visionary
At time of launch 3 categories of womens clothing dominated the market: junior, bridge & missy bebe tapped into unexploited demographic of women by offering stylish, inspirational & sexy clothes

bebe: Brand ID
Physical
bebe logo Body conscious designs Womens ready to wear apparel Physical Personality

Relationship

Modern Innovative Fashion forward

Relationship

Culture

Reflection

Sexy Feminine Exhibitionist

Reflection Self Image

bebe: Brand ID
Personality
Sexy Edgy Confident Physical Personality

Culture

Californian Provocative Self Expression Youthful Porno Chic Fierce Sexy Confident Socially Elevated

Relationship

Culture

Self Image

Reflection Self Image

bebe: brand architecture

Branded House with sub-Brands
bebe
store in 1976 Womens 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 1st

BEBE SPORT (PH8)

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

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

Primary Competitive Factors
Brand Name Recognition
Product quality Product pricing Customer service

Product styling

Product presentation

Store ambiance

Convenience

Global apparel, accessories & luxury goods market shrank by 6.6% in 2008 to $1,334.1 billion
Womenswear accounts for 47.5% of global apparel, accessories & luxury goods market's value
In 2013, Global apparel, accessories and luxury goods market is forecast to have an increase of 42.7% since 2008

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

Bebe: Competitive Environment

Polo Ralph Lauren Luxury Chanel

Dior

Tommy Hilfiger Jones Apparel Anne Taylor

Nordstrom Banana Republic Club Monaco

Guess?
bebe

Conservative Gap Urban Outfitters XOXO BabyPhat Victoria Secret

Sexy

Old Navy Mass

American Apparel

Bebe: Short History

One of the top womens retailers developing the contemporary market for the masses

2009 All BEBE SPORT stores & merchandise converting to PH8

2003 1998 Went public & launched www.bebe.com online store Launch of BEBE SPORT

1997 Opened 1st 2b bebe (bebe outlet store)

1976

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

Bebe: collaborations
Madonnas Greatest Hits compilation
What? Purchase & download individual songs/whole album from bebe website

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

Bebe: collaborations
Pussycat Dolls Shhh
What?

Dec 2008: partnered with Pussycat Dolls creator Robin Antin to launch Pussycat Dolls Shhh lingerie line available @select bebe stores & bebe.com.
Why? Brand Extension & PR: created buzz while launching new product line designed by hip band that emanates brand values

Bebe: collaborations
Nicole Richie for bebe
What? Fall 2009: debut jewellery line created exclusively for bebe Keepsake bracelet sold at select bebe stores & bebe.com will donate 25% of proceeds to Richie-Madden Childrens Foundation

Why? Positive Brand Association, PR & CSR

bebe: Special Services

What?

Bebe iPhone & iPod Touch application

How? users can search, browse & purchase products on bebe.com Why? Great Brand Association Attracts younger target market Increases foot traffic on bebe.com

bebe: Special Services

What?

Virtual Bebe
How? Opened Virtual World shop on THERE.com Why? Creates buzz Attracts younger target market Increases foot traffic on bebe.com

bebe: Special Services

What?

beTXTED
How? Users text VIP for exclusive offers & promotions sent to their mobile phones Why? Creates buzz Attracts younger target market May generate spontaneous purchases

bebe: Special Services

What?

Clubbebe
How? 1 point per $1 $10 bonus with every 250 points Double points events Exclusive in-store events Why? Strengthens customer loyalty May generate spontaneous purchases

bebe: mass market price comparison

bebe Gap Urban Outfitters $298 $78 $58 Victorias Secret $218 $88 $69 Jacket Dress Pants $259 $139 $119 $148 $59 $69

Sweater

$69

$45

$78

$48

bebe: luxury market price comparison

bebe Anne Klein Guess? Inc. Tommy Hilfiger $675 $299 $179 $194 Jacket Dress Pants Sweater $259 $139 $119 $69 $650 $350 $195 $140 $320 $130 $185 $95

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

Bebes 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

Edgy, high-impact, visual advertising campaigns
Use: print, outdoor, in-store, direct mail & e-mail
Runway collections since 2006 Line of merchandise branded with distinctive bebe logo to increase brand awareness GOAL: maintain focus on core customers while elevating brand to "attainable luxury" status Attract customers by playfully sensual & evocative imagery of bebe lifestyle

bebe: faces
Mischa Barton new face of bebe
beginning Summer 2006

Eva Longoria new face of BEBE SPORT

launching for Spring/Summer 07

Rebecca Romijn new face of bebe

launching for Summer 2007

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

bebe Affiliate program

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

bebe: licensing agreements

August 2009
Titan Industries to design, manufacture & distribute women's Inter Parfums, Inc. to non-casual footwear design, develop, 2007 manufacture, distribute, In stores Spring 2010 Safilo Eyewear to advertise &promote develop, market & fragrance & color products sell sunglasses in available in 2009 bebe stores & August 2007 Solstice owned Skechers Footwear to stores produce entire BEBE first sunglasses sold SPORT/bbsp footwear 2007 products & distribute to bebe stores & other stores worldwide began selling 2008

Eyewear license agreement for optical eyewear represents less than 1% of business in 2009 expires on June 30, 2010

July 2008

bebe: International Distribution Business Model

Wholly owned stores
US, Canada, Puerto Rico, & US Virgin Island

Do not sell @ wholesale

bebe: International Distribution Business Model

33 Licensed Stores
South East Asia, United Arab Emirates, Israel, Russia, Mexico & Turkey
In fiscal 2010, plan to expand from 33 to 54 licensee operated stores including Oman, Qatar, Bahrain, China & Hong Kong

bebe: Store Concept

Upscale, 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: Merchandising
Strategy
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
Semi annual collection preview events
clients preview latest collections at bebe stores

Host events benefiting non-profit organizations

partners with national and regional magazines to 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

Financials
$700 $600

Thousands

$500 $400 $300 $200 $100 $0 2005

Net Sales

2006
Gross Margin

2007
Income from Operations

2008
Net Income

2009

bebe: Measurement of Success

Cost of goods sold/Net Sales 2005 0.503526 2006 2007 2008 2009

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

$600 $500 Thousands $400 $300 $200 $100 $0 2005 2006 2007 2008 2009

Debt

Total Assets

Working Capital

bebe: Measurement of Success

Dividend Declared
$0.25 $0.20 Dividend Amount $0.15 $0.10 $0.05 $0.00 Dividend Declared

2005

2006

2007

2008

2009

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

2b bebe stores
Fiscal 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

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

BEBE SPORT stores

Fiscal 2009 opened 1 & closed 2 expanded 1 existing store to a larger space

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

bebe: Appraisal of Brand Equity Creation

Financially intriguing seems quite weak in 2008 & 2009 as profits plummet; however it has no long term debt Strong brand recognition due to consistent communication to consumers Leveraging Knowledge Strategic locations & good use of international franchising

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!