Michael Zimmerman's Prentice has published an open letter to the board of directors of Bebe Stores Inc, blasting company management for their disregard for shareholders interests and the resulting weak value of shares.
Michael Zimmerman's fund begins its tirade "We are writing to express our extreme dissatisfaction with the Board's continuing and blatant disregard for the interests of BEBE shareholders" before going on to lambast the lack of response to investors attempts to communicate with the board of directors. Prentice continue, "companies usually trade at a (significant) premium to their underlying net assets; unfortunately, as we sit here today, the market is ascribing a significantly negative value to BEBE's business and management team (something which rarely happens)."
Prentice Capital's Zimmerman then went on to outline four steps he believe's the company has a duty to undertake in order to enhance the company's value. These included monetizing real estate holdings, strengthening its balance sheet by securing a credit line, communicating a turnaround plan to shareholders and considering strategic alternatives.
Prentice Capital Management has increased its holdings in Bebe Stores Inc according to disclosures filed with the SEC. As reported Michael Zimmerman’s Prentice Capital Management’s owns 5.38% or 4,240,901 shares of Bebe.
Bebe Stores did not respond to our request for comment at the time of publishing this article.
Michael Zimmerman's hedge fund Prentice Capital is a financial investment advisory firm headquartered in Connecticut. The fund primarily invests in consumer and retail equity stocks.
About Prentice Capital Management
Prentice Capital Management LP focuses on private and public equity investments in the U.S. consumer and retail sectors, and has disclosed significant holdings in other high street brands including Gaiam and Pacific Sunwear.