Bebe Stores to close PH8 division, possibly convert some to 2b bebe by end of fiscal 2011

Bebe to close PH8 division by end of fiscal 2011

BRISBANE, Calif. — Bebe Stores Inc. plans to discontinue operations of its PH8 division, less than a year after announcing the retail concept would replace its Bebe Sport stores.

The women’s clothing chain has 48 PH8 stores and they will either be closed or converted to the 2b bebe concept, featuring contemporary fashion.

The company also said Tuesday it expects that revenue at stores open at least a year will be at the low end of its guidance.

In May, the company said it expected revenue from stores open at least a year would range from falling in the mid-single digits to rising in the mid-single digits. The figure is a key one for retailers because it measures growth at existing stores rather than new ones.

In a separate announcement, Bebe said its board has declared a one-time cash dividend of $1 per share due to a payment it received related to securities held at UBS. It will pay the dividend on July 30 to shareholders of record on July 21.

Its shares rose 35 cents, or 5.5 percent, to close at $6.68 Tuesday.

The company estimates it will see total pre-tax costs of closing or converting the PH8 stores worth about $17 million, including $2 million to the write-off of the net book value of PH8’s assets and up to $1 million to mark down inventory.

The company said in a news release both charges will be taken in the fourth quarter.

Of the $17 million, $14 million are related to future lease liabilities and potential salary expenses. Both of those cash charges will be recorded as stores close.

Bebe said it expects to begin to close or convert the PH8 stores in the first quarter of fiscal 2011, and finish within the fiscal year.

The company also said it remains comfortable with its earnings guidance. It said in May it expects earnings per share to range from a loss of 2 cents to earnings of 4 cents per share.

According to Thomson Reuters, analysts expect the company to earn a penny a share in the quarter. Bebe will announce its fourth quarter results on Aug. 26.