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NREI: The fashion segment has been particularly hard hit by the transformation in ways that consumers shop for clothes. Was the Bebe Stores store liquidation expected? Matthew Harding: It was not unexpected. The fashion industry has changed; it has accelerated with the onset of some fast fashion retailers—specifically H&M and Zara that are able to get current runway looks to the stores very quickly. It has become adaptive to finding out what consumers want and getting it to the stores right away. If you did not keep pace with that, it becomes much more difficult. It has become more competitive and a retailer cannot rest on its laurels or brand and feel that that will carry them along. We’ve seen a lot of fashion chains close over the last 10 years. NREI: Company sales had been declining for years, yet it has been reported that Bebe Stores had almost no debt and a significant amount of cash. Could it not have reorganized its finances and closed unproductive stores instead of pulling out of the brick and mortar channel completely? Matthew Harding: Being in malls, Bebe Stores would have a more limited universe of landlords to deal with, and they did not have all that many stores.

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