By Farhat Desai | Contributing Writer

(Courtesy of BNB Daily)

Bebe is now closing all of their stores and switching to online only. (Courtesy of BNB Daily)

Since its founding in the 1970’s, Bebe was a trendsetter in clothing and accessories for women in their 20s and 30s. Bebe’s style ranges from hip, sexy, sophisticated dresses to niche “Miami-style” fashion to everyday basics.

However, after almost four decades in the fashion industry, Bebe has been unable to compete with its contemporaries. Just two weeks ago, it was announced that Bebe is closing all its 168 department stores to fully transition business to their online website.

Although this might be surprising, it isn’t completely outrageous. There has been a radical trend in the retail industry where companies, even malls, are closing due to changing consumer preferences in shopping and spending. Although they were once giants, J.C. Penney, Sears and Kmart are now unable to meet consumer demands in quality and service and are losing revenue to Amazon, their biggest competitor and threat.

What is happening here? And what trends in consumer behavior and fashion are changing? Not only are consumers wanting fewer department stores to choose from, but online shopping has become a one stop shop and a lifestyle choice. Price affordability in this tumultuous economy also plays a significant role.

With the advent of more viable online resources (Amazon and Etsy), people rather shop at the convenience of their home, than physically go to a department store or a mall.

Consumers also want to participate in the high-end trends and luxury lifestyle, but pay, “fast-fashion” prices for these kinds of clothing and leather goods. “Fast-fashion” is inspired by high-end runway shows, where retailers quickly duplicate luxury brands’ tapestry or patterns and produce and distribute apparel within weeks. Fast-fashion is the current direction consumers are heading towards, as trends in fashion switch rapidly.

This “high-end style, yet fast-fashion affordability” or price range can be seen embellished on social media, specifically Instagram, where fashionistas (in their own right) and lifestyle bloggers replicate or find innovative ways to express their style on a budget.

In Bebe’s case, the company did not replicate high-end fashion trends to stay up to date, neither did it drop its price point. With heavy marketing, Bebe enjoyed peak success in 2006, where girls and women, were wearing “Bebe” rhinestone encrusted shirts and caps as their signature outfit.

However, as years progressed, they were unable to manifest latest trends in their clothing and accessories. They instead chose to stick to their niche market or target segment, by producing the same patterns or styles. Although, their specific target segment is loyal to the predictable Bebe fashion styles, Bebe was still unable to maintain sales, the reason being competition. As Bebe stayed the same in style and price, their consumers got older and more refined. With more brands that provide a diverse set of styles and choices at affordable prices, consumers started looking at their competitors, Forever21, H&M and Banana Republic as their preferred choice from everyday chic to business casual fashion.

With the latest trend in retail business of stores dropping like flies, and filing bankruptcy, from retailers BCBG Max Azria to Payless Shoestore, both closing over 500 stores in the U.S., it is understandable that consumers now want less options. In this space of virtual competition and minimal risk in price, online options are seizing market share from department stores.

In order for certain traditional retailers to survive, they will have to reinvent their brands, embrace current fashion trends and have a practical understanding of price point, adjusting to the income level of their consumers. They cannot demand higher prices for mediocre goods, especially in an industry where diverse alternatives are present. On a positive note, Bebe closing its retail space to transition online cannot be seen as a total failure. Maybe in some sense, this is their way of accepting and embracing the current retail phenomenon.


This article has 2 comments

  1. Was this written by Captain obvious? My cat knows why retail stores are closing.

  2. I agree with the author’s analysis of why bebe failed, but I will add that bebe started to produce cheap quality clothing and designs past few years. Other retailers are making better clothing for less expensive prices.

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