Bebe Stores Inc

Bebe Stores Corporation designs produce and sells stylish women wear. In the late 1990’s Business Week Magazine named it one of the fastest growing companies in the United States of America. In 22 states across the country Bebe has about 101 boutiques. The majority of these boutiques are in the expensive malls and the target markets are the trendy females between the ages of 18-35.

Bebe offers suits, dresses at a price which is very competitive to stores such as banana republic, Express and Guess. The store presents itself as a feasible choice to consumers who cannot afford the expensive price tag of dresses.

Bebe has achieved its success not only because of its cost effective management and manufacturing methods but also because of the Entertainment business. The designs of the company appear on famous television shows such as Friends, Beverly Hills 90210, and Ally Mcbeal. Movie stars such as Jennifer Lopez, Drew Barrymore and Alicia Silverstone have worn Bebe’s clothing in movies. Starting of Bebe The idea of Bebe was started by a former entertainment personality Manny Mashouf who was an expert in the management of arena’s and restaurants.
In the middle of the 1970’s, Manny Mashouf saw a chance to earn profit from the rising market of women ear which were being designed specially for trendy young consumers. He opened his first store in San Francisco in 1970. The name Bebe was used as it summarized many of the descriptions he wanted his clothes to portray. The name to Mashouf represented growth and was taken from Hamlet’s famous phrase which was to be or not to be and in Turkish it means Women and in French it means baby.
The name pronounced as bee bee was one of its kind and portrayed the customer and youthful and sharp originality which the company wanted its clothes to emerge. Bebe became an instant hit because its main focus was on clothes for the young and trendy females. The first couple of years, Bebe had one boutique and after several years it opened a branch in the northern part of California. Mashouf at first was very conventional in his approach to expand his business. He focused on the financial stability of the stores which he had already opened before opening up boutiques in new locations.
This approach worked perfectly and the company started to grow in the North and Western part in the 1980s. Success of Bebe Bebe had a control over its design and manufacturing cost which was making it more profitable. All products were being produced by Bebe itself. Keeping its overhead cost lower than other companies Bebe was using locally produced material in its clothing. This benefited Bebe a lot as the company was saving on additional costs and was controlling its overall image. To offer consistency in style and quality in its clothes, Mashouf and his team saw their products from the initial stage to the final presentation.
The popularity of the company grew very much in the 1980 and soon the company started to focus from trendy wear to sexy cocktail dresses. In the late 1980s, Bebe was in competition against big chains such as Ralph Lauren. It never kept a secret of its target market which was the young trendy females. The economy of United States started to grow and large and expensive malls were being built at a very fast pace. The company got its initial opportunity to expand from a local chain to a national brand.
By 1994 Bebe with its expansion campaign had opened 38 stores in a year in well located mall across the country. The prices varied from a simple t shirt costing $30 to a sexy short cocktail dress costing $150. Bebe advertised its clothes in famous magazines such as Vogue in which models were shown wearing Bebe’s dress and posing in seductive way. The image portrayed in the magazine worked perfectly and profit and its name soared to new heights. After the initial success of Bebe, it took a bold step to seek name identification from not only its advertising campaigns but also through celebrity publicity.
This step was taken because Bebe wanted the consumers to see the clothing on famous stars which would automatically associate those stars with the Bebe brand. This association would make profits rise even further than before. Heather Locklear a host of a successful television series in 1995 called Melrose Palace wore a dress of Bebe. In this show several attractive television stars were shown with unique dresses and were copied all around the country. The outfit of Bebe being showed in the series now started appearing on different celebrities including Madonna, Julia Roberts, Jennifer Lopez, Cindy Crawford etc.
and all of them were appealing to customers whom the company was trying to attract. Than Bebe’s dresses started appearing on famous shows including The Practice, Ally Mcbeal etc. The growing relationship between the entertainment industry and clothes was becoming a trend. In an episode of Ally Mcbeal, the story rotated around the length of a skirt worn by the star of the show. This skirt was of Bebe and after the show was aired, orders of the skirt went up all across the country. By the late 1990’s Bebe had become an important part of the entertainment industry. Bebe was not a trend setter like Ralph Lauren and Donna Karan were.
The success behind the company was its skill to precisely and quickly copy the styles of other trend setters from season to season. When Donna Karan came out with a pure, delicate dress for a season, Bebe followed with same design in a couple of weeks. By doing so, Bebe was allowing its fashionable customer to keep up with the new trendy wear. Duplicating the clothes of other famous brands, Bebe was offering the same trendy wear in half of what the customer would pay for the big brands. The company managed to make its own products which were attracting both celebrities and consumers without adding any significant costs.
Another success factor was the company’s test and reorder method, which was allowing Bebe to move its stock at a faster pace than its competitors. By this method, the company would begin shipping its products to stores in a limited quantity. If the product did remarkably well, the company would hold its new stock and started meeting the customer demands of the product which was doing well. As Bebe was making its own products, they had a firm control over the quantity of the products to be produced and at what pace they were to be produced.
This test and reorder method soon became an import part of the company’s financial position. Bebe had developed itself spectacularly in the 1990s from a single boutique to such a financial strength that it went public in 1998. The initial offering was $11 per share and around 2. 5 million shares were sold. Mashouf had 88% of the share after the company appeared on the stock exchange and he played an important part in the company’s expansion. The target market of Bebe was the younger trendy women mostly in the 20s but after its spectacular growth in the 1990s, the company started to target to even younger girls.
Bebe started to offer less expensive, logo inscribed t shirts, jackets and sweaters. The introduction of the new merchandise not only brought new customer but made the name of company more noticeable. The company’s primary products were suits and dresses but than it added more casual wear to its already successful collection. The company than was noticed by many retailers who became partners with the company after agreeing on terms which was quite profitable for Bebe. Bebe signed an agreement with Genender International which produces fashionable but reasonably priced watches.
Later another agreement was signed with Titan Industries to make footwear which was to be sold in Bebe shops and other renowned departmental stores. Than along with California design studio, Bebe produced sunglasses and optical frames with price ranging from $50-150. In late 1998, Bebe went online and introduced an online boutique which was a significant step in the technological era. In 1999, Bebe managed to open 11 more stores and by the end of May the company successfully opened its 100th store. Two stores were opened internationally with one being in Kent England and the other being Vancouver, Canada.
The popularity of these stored internationally encouraged the company to open more stores in countries like South east Asia, Israel and Greece. Bebe’s fairy tale success was not without risk. Bebe targeted to a limited customer market and was always condemned due to its small size and for creating clothes which could only be targeted to a small portion of the American female public. The expansion plan of Bebe was better than the company had planned and in 1999 the sales of the company were soaring and it became virtually unbeatable. Bibliography • Bebe Stores (2007) from Wikipedia. Retrieved on April 30, 2007 from http://en.
wikipedia. org/wiki/Bebe_stores • Bebe Stores. Retrieved on April 30, 2007 from www. bebe. com • Bebe Stores Inc, Company Profile from Wright Reports. Retrieved on April 30,2007 from http://wrightreports. ecnext. com/coms2/reportdesc_COMPANY_075571109 • Bebe from Sanfransicoshops. com. Retrieved on April 30,2007 from http://www. fillmoreshop. com/pages/bebe. html • Bebe Stores Inc from Yahoo. Retrieved on April 30,2007 from http://finance. yahoo. com/q/pr? s=BEBE • Bebe stores from Hoovers. Retrieved on April 30, 2007 from http://www. hoovers. com/bebe-stores/–ID__56757–/free-co-factsheet. xhtml

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