Bebe Analysis
Financial Statements Final Project
for Dr. Rimona Palas
TABLE OF CONTENTS
Executive Summary ………………………………………………………………………………………… 3
Background …………………………………………………………………………………………………………… 5
Marketing Analysis………………………………………………………………………………………… 11 Porter Analysis ………………………………………………………………………… 11 SWOT Analysis ……………………………………………………………………………… 14
Financial Statements Overview ………………………………………………………… 18
Ratio Analysis ………………………………………………………………………………………………… 20
Risk Analysis …………………………………………………………………………………………………… 28
Credit risk Analysis ………………………………………………………………………………… 28
Bankruptcy Analysis …………………………………………………………………………………… 29
Valuation ……………………………………………………………………………………………………………… 30
Conclusions ………………………………………………………………………………………………………… 33
Appendix…………………………………………………………………………………………………………………… 35
1. EXECUTIVE SUMMARY
Since 1976 BEBE designs, develop and produces a line of contemporary women’s apparel and accessories. Nowadays operates 285 stores in United States and 9 stores overseas. In addition 1% of its sells are done to 14 international licenses. BEBE is publicly traded on the NASADAQ for a value over 1.2 billion. BEBE targets women between the ages of 21 and 35 who are concern about fashion. During the last four years BEBE has expanded its number of stores markets and product lines, particularly in 2004 with a change of management.
BEBE’s industry is highly competitive due to very low entry barriers, many suppliers, easy substitutable products and buying power that is diluted among a large mass of buyers. In addition there are low exit barriers which predict an industry of low and stable income. BEBE’s sophisticated inventory control, high differentiation strategy and high sensitivity to fashion trend changes enable it to succeed at a domestic level however its limited size makes it difficult to compete with the largest players at a
for Dr. Rimona Palas
TABLE OF CONTENTS
Executive Summary ………………………………………………………………………………………… 3
Background …………………………………………………………………………………………………………… 5
Marketing Analysis………………………………………………………………………………………… 11 Porter Analysis ………………………………………………………………………… 11 SWOT Analysis ……………………………………………………………………………… 14
Financial Statements Overview ………………………………………………………… 18
Ratio Analysis ………………………………………………………………………………………………… 20
Risk Analysis …………………………………………………………………………………………………… 28
Credit risk Analysis ………………………………………………………………………………… 28
Bankruptcy Analysis …………………………………………………………………………………… 29
Valuation ……………………………………………………………………………………………………………… 30
Conclusions ………………………………………………………………………………………………………… 33
Appendix…………………………………………………………………………………………………………………… 35
1. EXECUTIVE SUMMARY
Since 1976 BEBE designs, develop and produces a line of contemporary women’s apparel and accessories. Nowadays operates 285 stores in United States and 9 stores overseas. In addition 1% of its sells are done to 14 international licenses. BEBE is publicly traded on the NASADAQ for a value over 1.2 billion. BEBE targets women between the ages of 21 and 35 who are concern about fashion. During the last four years BEBE has expanded its number of stores markets and product lines, particularly in 2004 with a change of management.
BEBE’s industry is highly competitive due to very low entry barriers, many suppliers, easy substitutable products and buying power that is diluted among a large mass of buyers. In addition there are low exit barriers which predict an industry of low and stable income. BEBE’s sophisticated inventory control, high differentiation strategy and high sensitivity to fashion trend changes enable it to succeed at a domestic level however its limited size makes it difficult to compete with the largest players at a