Bebe shares soar after $35 million acquisition adds 47 home furnishing franchise locations
Bebe Stores Inc.
BEBE,
stock soared more than 35% in Wednesday trading after the women’s apparel and accessories brand purchased 47 Buddy’s Home Furnishings franchised rent-to-own locations from Franchise Group Inc.
FRG,
for $35 million. The stores are located across the southeastern U.S. The purchase is “materially accretive to Bebe’s cash flow over time” and “diversifies Bebe’s profit stream over time,” according to a statement from Manny Mashouf, chief executive of Bebe. The deal was funded by a 1.5 million primary share purchase by B. Riley Financial Inc.
RILY,
at $5 per share, cash on hand, and a $22 million secured loan. Bebe stock has dropped 17.2% over the year to date while the S&P 500 index
SPX,
is up 10.3% for the period.
