SAN FRANCISCO - bebe stores, inc. (OTC:BEBE) has completed the sale of its membership interests in two of its brand joint ventures, bebe and Brookstone. The transaction involved a 50% interest in the bebe venture and a 28.5% stake in the Brookstone venture, amounting to $46.624 million in cash proceeds for the company.
With the cash from this sale, bebe stores has cleared its outstanding debt. Additionally, the company's Board of Directors has announced a special cash dividend of $2.00 per common share, which will be distributed to shareholders of record as of November 11, 2024. The dividend is set to be paid out on or after November 22, 2024.
Following the payment of the dividend, bebe stores will retain approximately $8.5 million. This reserve will be used to support the working capital requirements of its subsidiary, which operates over 60 Buddy’s Home Furnishings franchise stores, as well as to cover corporate expenses. These franchise stores, situated primarily in the Southeastern United States, provide furniture, appliances, and electronics to consumers on a rent-to-own basis.
This financial maneuvering by bebe stores, inc. reflects a significant reshaping of the company's portfolio and capital structure. By divesting from these joint ventures, the company has not only freed itself from debt but also returned value to its shareholders through the special dividend.
The company's strategic focus now appears to be on strengthening its core operations within the Buddy’s Home Furnishings franchises, with the retained cash poised to support the ongoing needs of this business segment.
The information in this article is based on a press release statement from bebe stores, inc.
InvestingPro Insights
Following bebe stores, inc.'s (OTC:BEBE) significant portfolio restructuring and special dividend announcement, InvestingPro data provides additional context to the company's financial position and recent performance.
As of the latest data, bebe stores has a market capitalization of $33.99 million, reflecting its current market valuation after the sale of its joint venture interests. The company's dividend yield stands at an attractive 6.06%, with the most recent ex-dividend date on May 31, 2024. This high yield aligns with the company's recent decision to distribute a substantial special dividend to shareholders.
In terms of recent stock performance, bebe has shown positive momentum in the short term. The stock has seen a 2.52% return over the past week and an 11.86% return over the last month. Year-to-date, the stock has gained 11.09%. However, it's worth noting that the stock is currently trading at 69.73% of its 52-week high, indicating potential room for recovery.
InvestingPro Tips highlight two key points for investors:
1. bebe stores has a high dividend yield compared to other companies in the sector.
2. The company's stock price has outperformed the S&P 500 over the past 3 months.
These tips, along with 9 additional insights available on InvestingPro, can provide investors with a more comprehensive understanding of bebe's financial health and market position following its recent strategic moves.
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