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June 27 Women's fashion retailer Bebe Stores Inc said it would exit its unprofitable "2b bebe" business, under which it sells affordable apparel and accessories, by July as part of a cost-cutting program.
The exit will allow the company to focus on its main brand's retail and outlet stores, and online and international licensing businesses, Bebe said.
The company said it would take a pretax charge of $5 million-$6 million related to the closure of the 2b bebe business, including 16 mall-based stores.
Bebe also said it would lay off about 9 percent of its total non-store employees and 1 percent of its store employees, taking pretax severance costs of about $3 million in the year ending July.
The job cuts are expected to save about $4 million in fiscal 2015, the company said.
Bebe estimated pretax annual savings of $9 million-$10 million from the cost-cutting program, beginning fiscal 2015.
The company also said it expected same-store sales to fall in low single digits in percentage terms in the current quarter.
In May, Bebe reported a net loss of 31 cents per share for the third quarter.
Jim Wiggett took over as the company's interim chief executive this month after Steve Birkhold resigned from the post.
Bebe's shares closed at $3.15 on the Nasdaq on Friday. The stock has lost about half its value over the past three months. (Reporting by Soham Chatterjee in Bangalore; Editing by Kirti Pandey)
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