Bebe Stores Multi-Unit Group to Refranchise 8 Buddy’s Home Furnishings | Franchise mergers and acquisitions


Multi-unit franchisee Bebe Stores has signed an agreement to re-franchise eight company-owned Buddy’s Home Furnishings stores in Kentucky and Indiana, bringing their total unit count to 55. Bebe, a publicly traded retailer based in San Francisco, which sells clothing and accessories – acquired its first 47 Buddy’s locations in November 2020 from Franchise Group for $ 35 million, with the additional rights to open 20 additional franchise stores.

Martin Fontela, COO of Bebe, said his group had no plans for any management changes for the eight Buddy’s stores. “My strategy has always been that when we acquire a business, you acquire people,” he said. “… Before I even think about leadership changes, I try to see what I can bring to the table in terms of inspiration, motivation, skill level, and I try to work with them. . “

Buddy’s, an option-to-buy rental retailer specializing in furniture, electronics and appliances, started franchising in 2009 and has more than 300 stores in the United States and Guam, of which approximately 270 are owned by franchisees. Buddy’s was acquired by Franchise Group in July 2019. Bebe is not disclosing how much they paid for the eight stores, Fontela said, but he believes Buddy’s is not planning a broader refranchising strategy at this time.

Fontela’s career in option-to-buy leasing began in 2003 when he became general manager of a previously franchised Aaron’s store and rose through the ranks to corporate vice president. . He then partnered with another group and became vice president of seven Buddy’s stores, helping to expand their footprint to 62 stores before joining Bebe in October 2020.

Martin Fontela joined Bebe Stores—A San Francisco-based publicly traded retailer that sells clothing and accessories—as COO in October 2020. Bebe now owns 55 Buddy’s Home Furnishings franchise stores and account.

“I want to say that five years ago Buddy’s almost had a division, with one band doing one thing and another band doing something else,” Fontela added. “I think that today more than ever the groups are united and people are very excited to see others expand while also growing. When we bought these eight stores, I don’t even know how many emails, texts, and phone calls I got, not just from the top tier, but even from managers, telling me ‘man, that’ is awesome, we are so excited for you ”. ‘I thought it was very clean. “

Bebe’s existing footprint is concentrated in Florida, Georgia, North and South Carolina, Virginia, Alabama, Mississippi, Tennessee, Arkansas, and Louisiana. The deal marks the group’s first stores in Kentucky and Indiana, which they are excited to expand into, Fontela said.

“I think once we get our stores up to standard with the rest of the stores we do, I think we’ll start looking for options to expand into this area,” Fontela said. “You have to have the right surrounding systems in place, and the people really are the most important thing, so once we cement that, I think that’s a territory we can certainly expand into.”

By November, they plan to open a new Buddy’s store in Richmond, Virginia, as part of their growth strategy to saturate Virginia and North Carolina, Fontela said. Bebe is negotiating with the owners to build their additional 19 locations and also hopes to grow by acquiring smaller mom-and-pop stores in the buy-to-buy space and renaming them Buddy’s stores.

“We are actively researching and also considering some one-off, option-to-buy rental stores that attempt to exit the business,” Fontela said.

“At Buddy’s, anyone who walks in [to the system] now I’m lucky, ”he added. “All the dirty work has been done for all possible franchises to come. I think they’re now becoming more of a business-in-a-box, so to speak; a plug-and-play type of agreement that’s good for everyone.


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