Dive Brief:

• Women's wear retailer Bebe Stores on Thursday reported fiscal third quarter results that badly missed Wall Street expectations. The company posted a $30 million net loss for the quarter, representing $0.37 loss per share; Q3 revenue fell 13.7% to $79.9 million from year-ago totals, well short of expectations of $81.01 million. 

• Bebe's Q3 same-store sales fell 8.1% on declines in mall traffic and lower average unit retail. The company closed 12 Bebe stores and two outlet stores, also eliminating 86 corporate jobs during the quarter.

• Bebe said it plans to close up to 40 additional underperforming stores in fiscal 2017. CEO Manny Mashouf also said in a statement that the company is looking for “several potential sources of liquidity through the leveraging of our assets.”

Dive Insight:

Bebe hasn’t really ever recovered from the departure of creative director Neda Mashouf, who exited after her 2007 divorce from Mashouf, who was then president and controlling investor before taking over as CEO earlier this year.

In 2014 Ryan Drexler, president of private equity firm Consac LLC, urged Bebe to consider a sale or going private, expressing criticism of what he called Mashouf's "questionable" financial holdings. Bebe's fortunes seemed to revive somewhat later that year after naming retail veteran and Jackson Hole Group founder Jim Wigget as CEO, but the company struggled to gain traction, and Wigget stepped down earlier this year.

Mashouf blamed Bebe's Q3 woes on costs incurred in connection with efforts to restructure its operations, including headcount reductions and the closure of non-productive stores. "As of the end of the quarter, we have eliminated 86 corporate positions with an anticipated annual savings of approximately $9.0 million," he said in a statement. "Going into the fourth quarter we are continuing to move forward with our strategy of streamlining the production cycle for our product, improvements to the assortment within each of our stores, further rationalization of the store fleet, and continued focus on discretionary spending."

Bebe plans to close up to two stores and one outlet store during its fiscal fourth quarter. Total store square footage is expected to decline approximately 8% in comparison with the end of fiscal 2015.

Bebe currently operates 150 retail stores and 38 outlet stores across North America. It also distributes and sells branded product via licensees in more than 20 countries.