MANAGEMENT PRESENTATION - June 2015 - Jefferies

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
MANAGEMENT PRESENTATION
June 2015

               Strictly Private and Confidential
MANAGEMENT PRESENTATION - June 2015 - Jefferies
OVERVIEW

•   Established in1976, bebe is an iconic
    contemporary accessible brand with
    strong brand equity and a distinct offering
    of apparel and accessories
•   Designs, develops and produces
    contemporary women’s apparel and
    accessories under the bebe, BEBE SPORT
    names
•   The Company is currently executing a
    turnaround plan and implementing a
    number of merchandising and
    operational initiatives
•   Operates approximately165 bebe retail
    stores and 36 bebe outlet stores in the
    U.S., U.S. Virgin Islands, Puerto Rico and
    Canada. Company is in advanced
    negotiations with landlords to maintain
    store locations and rent
•   Runs e-commerce business @bebe.com

•   Distributes and sells bebe branded
    product through licensees in
    approximately 20 countries

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
INVESTMENT HIGHLIGHTS
 Historically high margin and bottom-line accretive vertical apparel business in the process of
                        turnaround and with ample future growth potential

                               Distinctly positioned with merchandise designed to suit the lifestyle of a
                                                    confident and feminine woman

                              Upgraded management team led by highly experienced executives and
                                           strong design and merchandising talent

                                        Turnaround strategy underway with tangible progress

                               Solid and scalable retail store operations, technology and supply chain

                                           Premier store locations primarily in A and B malls

                             Focus on growth strategies in international, domestic wholesale, outlets and
                                                             e-commerce

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
BRAND POSITIONING
 bebe skews trendier and more fashion-forward than most of its competitors, and strives to
                                      provide value

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
THE bebe WOMAN

• Wears her confidence – likes to be noticed
  and instills confidence in the woman who
  wears it

• Lives a “24/7” lifestyle, constantly juggling
  work and her social life

• Embodies power and glamour, is ageless and
  stands out from the crowd

• Considers herself a trendsetter and puts her
  own spin on the latest fashions

• Prefers clothing that accentuates her curves;
  bebe is sexy

• Looks for value and uniqueness when she
  shops

• Diverse customer demographics including
  fast growing ethnicities

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
EXPERIENCED MANAGEMENT TEAM

Elevated and empowered executive team with upgraded design and merchandising front-end
                                     leadership
  Name & Title                                Year Joined bebe                 Prior Experience                   Years in
                                                                                                                  Industry
  Jim Wiggett – CEO                                2014           Founder of The Jackson Hole Group, prior          40+
                                                                  retail experience in Macys, Duty Free and
                                                                   managing multiple brands under LVMH

  Liyuan Woo – CFO                                 2010           M&A and financial advisory to private equity      17+
                                                                    and strategic corporations at Deloitte

  Brigitte Bogart –EVP, Design                 Re-joined 2013    Design director during bebe peak years, prior      25+
                                                                   entrepreneur and experience with many
                                                                 brands such as Laundry by Shelli Segal and
                                                                                  Guess etc.

  Mary Jimenez –SVP, GMM                       Re-joined 2014     Head of bbsp during bebe peak years, prior        25+
                                                                 head of merchandising at Marciano, a division
                                                                   of Guess and previously worked for LVMH

  Denise Cox –SVP , Production                     2009          SVP at Haggar Clothing Co.; production and         25+
                                                                    sourcing positions at VF Corporation

  Susan Powers – SVP, Stores                       2007             VP of Store Operations at Chico's/White         25+
                                                                   House Black Market, Wet Seal and BCBG

  Erik Lautier – EVP, Chief Digital Officer        2014            Head of eCommerce at Lacoste and Edun            15+
                                                                 (LVMH); significant experience in startups and
                                                                           digital strategy consulting

  Richard Pierson – SVP, International             2010            VP of International at Tommy Hilfiger and        23+
                                                                  Guess prior to joining bebe with 17 years of
                                                                     international expansion experience
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MANAGEMENT PRESENTATION - June 2015 - Jefferies
STRONG BRAND HERITAGE WITH AMPLE UPSIDE
For over 40 years, bebe has been a well known value oriented fashion brand. Brand messaging has
                        been inconsistent, which confirms upside potential

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
Strategic Initiatives
MANAGEMENT PRESENTATION - June 2015 - Jefferies
SIX PRONGED TURNAROUND STRATEGY

 1. Product Distinction                                               2. Brand messaging
Increase product distinction with a contemporary,                           Align marketing campaign from
accessible, fashion merchandised offering                                   traditional to new media, focused on
designed to suit the lifestyle of this confident,                           messaging that speaks to the bebe
sexy, feminine, and sophisticated woman                                     woman

 6. Long term growth                                                                 3. Domestic Wholesale
                                                                                     Expansion of branded product into
ROI-based investment for sustained                                                    other retail operations
long-term growth

       5. International
                                                                           4. Outlets
      Maintain international presence through company
        turnaround                                                    Refine outlets so product and messaging better
      Strategically plan growth initiatives as we learn from our US    align with the bebe brand
        successes

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MANAGEMENT PRESENTATION - June 2015 - Jefferies
PRODUCT DISTINCTION

•   Continue to revamp the design, merchandising, production
    and marketing processes to ensure consistent delivery of a
    cohesive fashion assortment throughout 8 seasons representing
    strong collections in multiple lifestyles that reflect our customer

     –   Distinct offering falls into lifestyle categories

     –   Maintain core competency in dresses and party while building out
         the tops assortment and accessories

     –   Focus on outfits, layers, and special occasion. Expanding her
         special occasion offerings will improve AUR, UPT and ADS

     –   Continue to build on the success of accessories and seeking other
         incremental opportunities

•   Merchandise calendar assumes 6-weeks, 8-seasons design with
    collaboration from merchandising and marketing on outfitting
    to ensure a coherent offering, consistent messaging, and cost
    savings

     –   Initiated the full roll out of localized lifestyle outfitting

     ―   Consistency in planning, designing, merchandising, and floor
         presentation

•   Shift from IMU focused pricing to quality and value oriented
    pricing

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BRAND MESSAGING
•   Redefining brand message to reflect the essence
    of the bebe woman across all channels

•   Building brand relevance in social media through
    Facebook, Instagram and Pinterest
     ―   Act as a fashion resource
     ―   Starting a social impact campaign

•   Upgrading loyalty and CRM platforms which
    segments customers into distinct groups with
    targeted approach in product and messaging
     ― Using an email service that enables one-to-one
       cross-channel marketing
     ― Outlet CRM:
           §   Reconnect with outlet marketing team
           §   Align messaging to ensure consistency with bebe
                brand

•   Launched standalone iPad/iPhone version of
    digital catalog

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DOMESTIC WHOLESALE

•   Opportunity to introduce the brand to customer base
    with product that is distinct; reinforces the DNA of the
    brand, and supports the overall perceptions of the
    brand

•   Includes multiple merchandise categories such as
    handbags, shoes, intimates, and accessories etc.

•   bebe product will be featured both in branded shop-
    in-shops, as well as within wholesale partners'
    presentations

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OUTLETS
•   Rebranded all stores as ‘bebe’ to reinforce the single brand focus
     ―   Eliminated 2b product and optimized the mix of bebe MFO, logo.
         and clearance products transferred from main stores

•   Maintain the casual offering successes under the bebe label
     ―   Maximize the made for outlet opportunity with brand approved bebe
         product that increases customer awareness while delivering
         incremental revenue
     ―   Creates an opening price-point for the bebe line, which leads into
         mid-priced product in bebe stores and the higher range of product in
         key lines

•   Strategically incorporate non-apparel product into outlets
     ―   Goal of 20% store penetration by 2016

•   Increase top line and bottom line while retaining brand equity
    and integrity
     ―   Increase Average AUR, IMU% and GM%

     ―   Pop-up locations to eliminate MDs

•   Goal is to add 38 new outlets by FY 2018 for a total outlet portfolio
    of approximately 70 outlet locations

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INTERNATIONAL GROWTH
•   The bebe brand has found success internationally by serving a sophisticated,
    branded customer, and offering an aspirational product

•   Enhanced product assortments. Branding efforts are receiving a positive response
    from the consumer

•   Currently in 25 countries with 10 partnerships and working to build store count through
    our brand transition
     ―   Position our partners for future success when brand has strategy and positioning back in alignment

     ―   Monitor US selling and successes and then build on those internationally

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Financial Highlights

           Strictly Private and Confidential
FISCAL YEAR FINANCIAL HIGHLIGHTS
                                                      FY14               FY13           FY12
                                                  July 5, 2014       July 3, 2013   June 30, 2012
  Net Sales                                          $425.1             $463.2         $519.8
  Gross Margin                                       32.5%               33.3%         40.2%
  SG&A as % of sales                                 46.5%               42.6%         36.0%
  Operating Income (Loss)                           ($59.7)              ($43.0)        $21.8
  Income (Loss) from Continuing Operations          ($59.2)              ($69.1)        $13.2
  EPS from Continuing Operations                    ($0.75)              ($0.84)        $0.16
  EBITDA after one-time items                       ($28.7)              ($7.2)         $41.8

  Stores at end of period                            207                  242           252

  Actual to 40% Margin Delta                         $31.9               $31.1

              • Margin drain, significant SG&A increase coupled with sales productivity
                issues were main factors for a disappointing FY13 & FY14

              • FY15 is a reset year for margin level and store counts

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9-MONTHS FY15 INCOME STATEMENT SUMMARY
                                                      April, 3               April 5,
                                                       2015                   2014
 From Continuing Operations                    (In millions) (unaudited)     (In millions)

 Net Sales                                             $323.7                 $321.5

 Gross Margin                                          108.9                   106.1

 SG&A                                                  129.0                   141.7

 Net Loss (None-GAAP)                                  $18.4                   $32.5

 Net Losses Per Share (None-GAAP)                      0.24                     0.41

 Normalized EBITDA                                     ($6.4)                 ($17.9)

                     • Updated guidance of ‘low-single digit sales comp’ and ‘low-
                       single digit loss per share range’

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IMAGES EXPLAIN THE NUMBERS - OVERTLY SEXY FY14 & Q1 FY15

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INTRODUCTION OF THE FALL COLLECTION – WEAR YOUR CONFIDENCE!

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FOLLOWED BY HOLIDAY PRESENTATION – NO LABEL REQUIRED

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FOLLOWED BY SPRING COLLECTION – MORE CASUAL LIFESTYLES

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bebe LIFESTYLES - OUTFITTING FOR EVERY ASPECT OF HER DAY

 SPECIAL     PARTY   DRESSY    BUSINESS   LOGO        BBSP
 OCCASSION           CASUAL    CHIC

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bebe LIFESTYLES MAP
   •   Largest offering in the Dressy Casual lifestyle - versatile pieces that can be worn day to night
   •   Protecting our heritage of Party and Business Chic at higher price points

          Price

High                                                                      SP.
                                                                         OCC.
                                                                         3%

                                 BUSINESS                      PARTY
                                   CHIC                         20%
                                   20%
                                            DRESSY CASUAL
                                                 40%
Core

                   BBSP
                    2%
                          LOGO
                           10%

Opening                                                                                     End Use
             Day                                                                    Night
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THE NEW EXCITEMENT IN DRESSY CASUAL OFFERINGS FALL 2015

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THE NEW EXCITEMENT IN DRESSY CASUAL OFFERINGS FALL 2015

                                                   25
THE NEW SPECIAL OCCASION OFFERINGS FALL 2015

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BUSINESS CHIC LIFESTYLE OFFERINGS FALL 2015

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NEW STORE CONCEPT DRIVES SALES AND MARGIN
                                                   • bebe is currently positioned in 170 of the
                                                     312 defined A and B volume malls

                                                   • Elevate the bebe brand and shopping
                                                     experience through windows and in store
                                                     merchandising

                                                   • New store concept currently rolled out to
                                                     8 bebe stores. Comparable performance
                                                     indicates 5-8% margin gain and increase
                                                     in sales per SF

• Plan to roll out the concept to all new and
  relocated stores

• Strategically pre-plan floor sets, fixture and
  marketing needs by partnering with
  merchandising, marketing, and design teams

• Improve window display and in-store
  marketing in partnership with marketing team

• Non-apparel table testing successful with
  planned 50% rollout by March 2015

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NEW STORE CONCEPT – INTRODUCTION SUMMER 2014

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NEW STORE CONCEPT – INTRODUCTION SUMMER 2014

                                               30
NEW STORE CONCEPT – INTRODUCTION SUMMER 2014

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NEW STORE CONCEPT – INTRODUCTION SUMMER 2014

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NEW STORE CONCEPT – INTRODUCTION SUMMER 2014

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BALANCE SHEET AND CASH FLOW SUMMARY
                                                          April, 4                   April 5,
                                                           2015                       2014
                                                   (In millions) (unaudited)   (In millions) (unaudited)

 Cash and Investments                                      $76.9                      $139.0

 Merchandise Inventories                                    32.6                        31.9

 Property and Equipment, net                                93.9                        96.1

 Total Assets                                              $225.2                      $292.1

 Total Liabilities                                         69.1                        72.8

 Shareholders’ Equity                                      $156.1                      $219.3

                     • Planned CAPEX of $18M for FY15 and directionally lower for FY16

                     • Planned Dividend payments of $0 for Q3 and Q4 FY15

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SHORT TERM TURNAROUND & LONG TERM GROWTH
 •   Driving increased store productivity through focused merchandising and marketing initiatives as well as
     new store concept rollout and visual presentation to ensure global-level leverage

 •   Focus on high quality sales through improved product offering, better managed promotions, and
     disciplined approach to inventory management

 •   Managing and planning for investments in inventory, SG&A, and CapEx
      Ø   Managing inventory in line with test and react strategy and ensure
FORWARD LOOKING STATEMENTS

Certain statements in this presentation are "forward-looking statements" made pursuant to the safe-
harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements
reflect the Company's current expectations or beliefs concerning future events and are subject to
various risks and uncertainties that may cause actual results to differ materially from those that we
expected. The statements in this presentation, other than historical information, contain forward-looking
statements that involve risks and uncertainties that could cause actual results to differ from anticipated
results. Wherever used, the words “expect,” “plan,” “anticipate,” “believe” and similar expressions
identify forward-looking statements. Any such forward-looking statements are subject to risks and
uncertainties. Some of these risks include, without limitation, miscalculation of the demand for our
products, effective management of our growth, decline in comparable store sales performance,
ongoing competitive pressures in the apparel industry, changes in the level of consumer spending or
preferences in apparel, loss of key personnel, difficulties in manufacturing, disruption of supply, adverse
economic conditions, and/or other factors that may be described in the Company's annual report on
Form 10-K and/or other filings with the Securities and Exchange Commission. We undertake no
obligation to publicly update or revise any forward-looking statement.

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