- Bebe Stores announced on Thursday that it is purchasing another eight Buddy's Home Furnishings rent-to-own franchises from Franchise Group, according to a company press release.
- The company also announced that it has refinanced by entering into a credit agreement providing a five-year senior secured term loan of $25 million with an additional drawdown capacity of up to $10 million from SLR Credit Solutions.
- Proceeds from the financing were used to retire an existing secured term loan of $22 million and will also be used for growth.
Last fall, Bebe made the surprising decision to get into the rent-to-own space with the purchase of 47 Buddy's Home Furnishings franchises. At the time, CEO Manny Mashouf called the move "a transformational acquisition" as the company also revealed its intent to open additional Buddy's locations.
Bebe was once a mall retailer, but in the summer of 2017 paid $65 million to close its entire store footprint and narrowly avoid bankruptcy. It then expanded a partnership with Bluestar Alliance by turning over its intellectual property rights, international wholesale agreements and e-commerce URLs to their joint venture.
Then, in early 2019, Bebe revamped its e-commerce site and loyalty program.
The company now distributes Bebe-branded products through licensees in 100 stores globally and online — and is simultaneously in the furniture business through its Buddy's franchise stores. The Buddy's locations are primarily in the Southeastern part of the U.S, with the new eight Buddy's stores in Kentucky and Indiana.
The company may have more in mind as financing goes to growth capital purposes.
"This refinancing allows us to meaningfully lower our cost of capital while providing further financial flexibility to execute on our strategy to deliver future growth from our platform," Mashouf said in a statement.
The home sector continuously reported strong results during the early parts of the pandemic, as many people began working from their homes and events were canceled to stymie the spread of COVID-19. There are questions if the segment can keep up its momentum as home projects begin to slow.