Now that the company's fundamentals are on the mend, including the realization of $20 million in cost savings for 2015 and 2016, Wiggett is looking for ways to propel Bebe forward. One of those initiatives is growing its presence overseas, where through partnerships, its products are currently sold in 25 countries. Future plans include expanding in China, Brazil and Latin America.
Another of Bebe's strategies is to enter into a wholesale agreement with a yet-to-be-announced retailer. Chief Financial Officer Liyuan Woo said this strategy fits into the brand's sweet spot, as its internal research found its biggest competitors aren't fast-fashion retailers, but department stores. For Wiggett, such a partnership presents an opportunity to reintroduce the brand to former customers.
"What I want is that customer to go, 'Wow, I forgot about Bebe,'" he said. "Because I want her to then come into the boutique."
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Wiggett also plans to beef up Bebe's outlet presence, and has set a goal to open 38 new locations over the next few years. That would give it a total of about 70 outlet stores. Wiggett sees further opportunity in outlet by producing items made specifically for those stores and capitalizing on its logo business, which sells there at full price, by making it a larger part of the mix.
That strategy stands in stark contrast to tactics being used by Coach and Abercrombie & Fitch, which are dialing back on their logo merchandise. But Woo said there are unique ways to sell logo, such as making it a subtle feature on a piece of apparel, or working it into non-apparel merchandise.
Logo product currently accounts for 10 percent of Bebe's business.
"We estimate the company may have opportunity to increase penetration of the logo business by several points after minimizing it under prior leadership," Mizuho's Chen said.
Chen, who has a "neutral" rating and $2.25 price target on the retailer, said that the company's balance sheet "remains in a solid position" with about $71.5 million in cash and equivalents, and that "the company has sufficient liquidity to reach profitability."
Still, performance of the small-cap stock has been volatile over the past year, most recently dropping on news that founder and Chairman Manny Mashouf intends to sell his 59 percent ownership stake.
And although Bebe managed to eke out a profit of 2 cents per share in the second quarter, it's expected to post another—albeit smaller—loss for the fiscal year, which ends this month. It will also face tougher comparisons as it advances its sales rebound.
"The key now is to make sure that consumers overall see the messaging and the brand messaging of Bebe as appealing," Telsey said.