Form SC 13D/A bebe stores, inc. Filed by: Prentice Capital Management, LP

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

 

Bebe Stores, Inc.

(Name of Issuer)

 

Common Stock, $0.001 par value per share

(Title of Class of Securities)

 

075571109

(CUSIP Number)

 

Michael Zimmerman

Prentice Capital Management, LP

100 West Putnam Avenue-Slagle House

Greenwich, CT 06830

(212) 756-8040

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

March 14, 2016

(Date of Event which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule l3G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

 

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

Cusip No. 075571109

 

1.

Names of Reporting Persons.

I.R.S. Identification Nos. of above persons (entities only):

 

Prentice Capital Management, LP

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions):

(a) o

(b) x

 

3.

SEC Use Only

 

4.

Source of Funds (See Instructions): WC (See Item 3)

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

 

6.

Citizenship or Place of Organization: Delaware

 

	Number of	7.	Sole Voting Power:	0
	Shares Beneficially	8.	Shared Voting Power:	4,377,081
	Owned by	9.	Sole Dispositive Power:	0
	Each Reporting Person With	10.	Shared Dispositive Power:	4,377,081

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person: 4,377,081 Shares

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares

(See Instructions): o

 

13.

Percent of Class Represented by Amount in Row (11): 5.55%*

 

14.

Type of Reporting Person (See Instructions): PN

 

 

*Beneficial ownership percentage is based upon 78,888,430 shares of common stock, $0.001 par value per share, of Bebe Stores, Inc., a California corporation (the “Issuer”), issued and outstanding as of February 1, 2016, based on information reported by the Issuer in its Quarterly Report on Form 10-Q for the quarterly period ended January 2, 2016, filed with the Securities and Exchange Commission on February 16, 2016.

 

 

Cusip No. 075571109

 

 

1.

Names of Reporting Persons.

I.R.S. Identification Nos. of above persons (entities only):

 

Prentice Capital Long/Short Equity Fund, LP

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions):

(a) o

(b) x

 

3.

SEC Use Only

 

4.

Source of Funds (See Instructions): WC (See Item 3)

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

 

6.

Citizenship or Place of Organization: Delaware

 

	Number of	7.	Sole Voting Power:	0
	Shares Beneficially	8.	Shared Voting Power:	4,377,081
	Owned by	9.	Sole Dispositive Power:	0
	Each Reporting Person With	10.	Shared Dispositive Power:	4,377,081

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person: 4,377,081 Shares

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares

(See Instructions): o

 

13.

Percent of Class Represented by Amount in Row (11): 5.55%*

 

14.

Type of Reporting Person (See Instructions): PN

 

 

*Beneficial ownership percentage is based upon 78,888,430 shares of common stock, $0.001 par value per share, of the Issuer issued and outstanding as of February 1, 2016, based on information reported by the Issuer in its Quarterly Report on Form 10-Q for the quarterly period ended January 2, 2016, filed with the Securities and Exchange Commission on February 16, 2016.

 

 

Cusip No. 075571109

 

1.

Names of Reporting Persons.

I.R.S. Identification Nos. of above persons (entities only):

 

Michael Zimmerman

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions):

(a) o

(b) x

 

3.

SEC Use Only

 

4.

Source of Funds (See Instructions): WC (See Item 3)

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

 

6.

Citizenship or Place of Organization: United States of America

 

	Number of	7.	Sole Voting Power:	0
	Shares Beneficially	8.	Shared Voting Power:	4,377,081
	Owned by	9.	Sole Dispositive Power:	0
	Each Reporting Person With	10.	Shared Dispositive Power:	4,377,081

 

11

Aggregate Amount Beneficially Owned by Each Reporting Person: 4,377,081 Shares

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares

(See Instructions): o

 

13.

Percent of Class Represented by Amount in Row (11): 5.55%

 

14.

Type of Reporting Person (See Instructions): IN

 

 

*Beneficial ownership percentage is based upon 78,888,430 shares of common stock, $0.001 par value per share, of the Issuer issued and outstanding as of February 1, 2016, based on information reported by the Issuer in its Quarterly Report on Form 10-Q for the quarterly period ended January 2, 2016, filed with the Securities and Exchange Commission on February 16, 2016.

 

This Amendment No. 1 to Schedule 13D (this “Amendment No. 1”) amends and supplements the statement on Schedule 13D (the “Original Schedule 13D”), filed on March 4, 2016 (the Original Schedule 13D, as amended and supplemented through the date of this Amendment No. 1, the “Schedule 13D”), by Prentice Capital Management, L.P. (“Prentice Capital Management”), Prentice Capital Long/Short Equity Fund, LP (“PC Fund”) and Michael Zimmerman (“Michael Zimmerman” and, together with Prentice Capital Management and PC Fund, the “Reporting Persons”) relating to the common stock, par value $0.001 per share (the “Common Stock”), of Bebe Stores, Inc., a California corporation (the “Issuer”). The Reporting Persons are making this single, joint filing because they may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. Capitalized terms used but not defined in this Amendment No. 1 shall have the meanings set forth in the Schedule 13D.

 

Except as specifically amended by this Amendment No. 1, the Original Schedule 13D is unchanged.

 

Item 4.

Purpose of Transaction

  

Item 4 of the Original Schedule 13D is hereby amended and supplemented by the addition of the following:

 

On March 14, 2016, Prentice Capital Management sent a letter (the “March 14 Letter”) on behalf of the Reporting Persons to the Board of Directors of the Issuer. The foregoing description of the March 14 Letter in this Item 4 is qualified in its entirety by reference to the complete text of the March 14 Letter, which has been filed as Exhibit 99.3 to this Amendment No. 1 and which is incorporated herein by reference.

 

Item 7.

Materials to be filed as Exhibits

 

Item 7 of the Original Schedule 13D is hereby amended and supplemented to add the following exhibit:

 

Exhibit 99.3

Letter, dated March 14, 2016, from Prentice Capital Management to the Board of Directors of the Issuer

 

 

 

Signatures

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: March 14, 2016

 

	PRENTICE CAPITAL LONG/SHORT
	EQUITY FUND, LP
	By: Prentice Capital Management, LP, its
	Investment Manager
	By:	/s/ Michael Zimmerman
		Name: Michael Zimmerman
		Title: CEO
	PRENTICE CAPITAL MANAGEMENT, LP
	By	/s/ Michael Zimmerman
		Name: Michael Zimmerman
		Title: CEO
	/s/ Michael Zimmerman
	Michael Zimmerman

 

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001).

 

 

Exhibit Index

 

Exhibit		Description
99.1		Joint Filing Agreement, dated March 4, 2016, signed by each of the Reporting Persons in order to confirm that this statement is being filed on behalf of each of the Reporting Persons*
99.2		Letter, dated March 4, 2016, from Prentice Capital Management to the Board of Directors of the Issuer*
99.3		Letter, dated March 14, 2016, from Prentice Capital Management to the Board of Directors of the Issuer

______________

* Previously filed.

 

 

Exhibit 99.3

 

Prentice Capital Management, L.P.

100 West Putnam Avenue

Slagle House

Greenwich, Connecticut 06830

 

March 14, 2016

 

 

 

Bebe Stores, Inc.

400 Valley Drive

Brisbane, CA 94005

 

Attention: Board of Directors

 

Ladies and Gentlemen:

 

We are writing further to our telephone conversation last week with Messrs. Mashouf and Parks. As we expressed on that call, we believe it is imperative that the Board of Directors (the “Board”) of Bebe Stores, Inc. (the “Company”), the Company’s controlling shareholder, and the Company’s management team, approach the Company’s continuing “freefall” collapse with a sense of extreme urgency. We are extremely concerned that the Board and Mr. Mashouf are neither cognizant of nor properly discharging their fiduciary duties to the Company’s minority shareholders. The Company’s March 7, 2016 announcement regarding Mr. Mashouf’s CEO compensation package only serves to underscore our deep concern.

 

Although Mr. Mashouf’s compensation package was presumably approved and recommended by your compensation committee and blindly benchmarked against the compensation of the Company’s previous CEOs and a self-selected group of supposed “peers,” we believe Mr. Mashouf’s compensation is wildly off-market and utterly inappropriate under the circumstances. Mr. Mashouf’s compensation package is especially disturbing in light of the Company’s declining market cap (now around $50 million) and his majority ownership of the Company. If Mr. Mashouf’s interests as a majority shareholder were truly aligned with those of the minority, and if he was truly invested in turning the Company around to capture its increased equity value, he would have foregone a salary altogether, as is the case with many founders who return to manage their eroding businesses years after their founding.

 

As we previously have expressed to you, consistent with the fiduciary duties of the Board, the Company’s controlling shareholder and the Company’s management team (or what remains of it and, in any case, excluding Mr. Mashouf), we expect that the protection of minority shareholder interests and value maximization should be of utmost priority and importance, and we expect the Company to take immediate action to reverse the Company’s current path of idly watching the continuing destruction of the Company’s assets, businesses, brand and shareholder value. Indeed, we urge the Board to immediately establish a special committee, composed entirely of independent directors with plenary authority of the full Board, to identify, review and undertake a deliberate and focused process to execute any and all strategic and financial alternatives available to the Company to return maximum value to the Company’s shareholders. All options should be on the table, including a strategic business combination, merger and sale of the Company as an entirety with and to an unaffiliated third party. Such committee should engage reputable and independent financial and legal advisors, and any recommendation(s) made by the committee should be binding such that Mr. Mashouf, in his capacity as controlling shareholder, should agree to vote on any transaction submitted to the Company’s minority shareholders for a vote, in accordance with such recommendation. We further expect that the Company and Mr. Mashouf, in his capacity as controlling shareholder, will not pursue or enter into any transaction or strategy to undermine or impair the value of the Company in any of the aforementioned possible transactions.

 

  

We believe there are interested and credible strategic and financial transaction candidates that may be interested in initiating discussions with the Company and that there are opportunities to unlock and return maximum value to shareholders. These urgent matters require the Board’s full and immediate attention. Time is of the essence, and we expect that Mr. Mashouf will obtain the input and approval of the full Board before unilaterally acting on behalf of the Company in his capacity as controlling shareholder with respect to any significant transaction involving the Company or its assets and businesses.

 

As we stated during our call, our objective has been and remains to work with you to help achieve the result that is in the best interest of all shareholders. We do not want to work against or around you. We, and indeed every public shareholder of Bebe Stores, Inc., await your reply and hope that you will take the matters expressed in this letter and our recommendation for action with utmost seriousness.

 

Sincerely,

 

/s/ Prentice Capital Management, L.P.

 

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