Virginia-based Franchise Group Inc. – parent company of Buddy’s Home Furnishings – has refranchised 47 Buddy’s locations to Bebe Stores Inc., a publicly traded San Francisco-based retailer that sells women’s apparel and accessories worldwide. The $35-million agreement also includes a planned development schedule for Bebe to open 20 new Buddy’s locations in the southeastern U.S.
“This transition provides Bebe Stores with an established profitable base of stores, offering a clear path for the future unit expansion and professional growth opportunities for its associates,” said Michael Bennett, Chief Executive Officer of Buddy’s. “We are excited to have Bebe as our newest franchise partner!”
Bebe closed all of its U.S. brick-and-mortar stores in 2017 to focus on licensed Bebe-branded products and online sales.
Bebe Chief Executive Officer Manny Mashouf called the new agreement “transformational,” as it provides Bebe with a way to tap into the home furnishings boom fueled by the pandemic. The lucrative home furnishings market continues to grow, as a second round of lockdowns has begun in Europe and the potential for similar mandates looms stateside. Buddy’s Home Furnishings is a huge independent rent-to-own operation nationwide, with more than 300 total locations.
Franchise Group will use the $35 million to repay debt. The company operates more than 4,000 franchised locations across North America, including Liberty Tax Service, American Freight and The Vitamin Shoppe.
“We’re pleased to partner with the founder and principals of Bebe to grow the Buddy’s business,” said Brian Kahn, Franchise Group Chief Executive Officer. “This transaction is a good example of how our company can use refranchising company-owned units to simultaneously de-lever its balance sheet and create growth for its brands.”
