B Riley Financial will increase its ownership in Bebe Stores to 76 per cent as Manny Mashouf, the founder of the women’s fashion retailer, agreed to sell more of his shares to the financial services provider before he steps down from his roles.
B Riley Financial has signed an agreement to acquire 3.7 million shares of common stock of Bebe from Mashouf for $18.5 million, with the transaction expected to close on September 30. Mashouf will continue to own 4 per cent of the company’s outstanding shares.
“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,” said Bryant Riley, chairman and co-CEO at B Riley Financial.
The chairman added that Bebe’s brand licensing investments generated about $11 million annually in cash flow over the past three years. B Riley expects Bebe’s Buddy rent-to-own segment will bounce back to an operating profit of about $6 million over time after suffering inflationary pressures in FY22 and FY23.
In January 2018, B Riley Financial said that it acquired 29 per cent of the fashion company. The company also has equity interests in Hurley, Justice, and Scotch and Soda along with a controlling stake in Catherine Malandrino, English Laundry, Joan Vass, Nanette Lepore, Limited Too, and Kensie.
