Bebe (BEBE) Discontinues PH8, To Pay $1/Share Special Dividend

Bebe Stores Inc. (NASDAQ: BEBE) announced Tuesday that it will discontinue the company's struggling PH8 line to focus on the development of its 2b bebe brand, adding that it expects to see fourth-quarter same-store sales at the low end of its previously disclosed forecast.

Bebe also rewarded investors with a one-time cash dividend of $1.00 per share.

The women's apparel retailer said that it plans to convert all 48 of its current PH8 into 2b bebestores next year, as it expects to see a $17 million pretax charge. The closures are expected to begin in the first quarter of the company’s fiscal 2011.

“The company made this decision based on the approximate after tax loss of $10 million during fiscal 2010, before taking into account costs associated with store impairment charges,” the company said in a statement on Tuesday.

The PH8 stores sell active street wear and performance products to women in the U.S. and Canada, and replaced the company’s 62 Bebe Sport stores. The PH8 brand was put in place last year to stem sales declines seen by the Bebe Sports stores.

The company added that it remains comfortable with the forecast for the fiscal fourth quarter it disclosed in May, which calls for a loss of 2 cents per share to earnings of 4 cents per share.

The one-time cash dividend of $1.00 per share is payable on July 30, 2010 to shareholders of record at the close of business on July 21, 2010.

Shares of bebe are up 3.79 percent in premarket trade Tuesday to $6.57.

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