Sale of Los Angeles Design Studio

On June 29, 2017, bebe stores, inc., a California corporation (the “Company”), entered into an Agreement of Purchase and Sale (the “Sale Agreement”) with Monday Properties Investments, LLC, to sell its Los Angeles Design Studio for a purchase price of approximately $35 million. The Company retains a right to lease back up to 12,000 square feet for up to four months after closing, with the ability to terminate this right with 30 days prior written notice. The sale is expected to close in mid-August 2017, subject to customary closing conditions.

The foregoing description of the Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the Sale Agreement, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ending July 1, 2017.

Retention Bonus

To encourage continued employment through the Company’s restructuring process, the Company entered into a retention bonus agreement with Walter Parks, the Company’s President, COO and Interim-CFO, on June 29, 2017. Mr. Parks is eligible to receive a retention bonus (the “Retention Bonus”) of five-hundred thousand dollars ($500,000) should he remain employed by the Company until December 31, 2017 (the “End Date”). The Retention Bonus will not be earned and will not be paid if he (i) voluntarily terminates employment or (ii) is terminated by the Company for cause prior to the End Date. If Mr. Parks’ employment is terminated by the Company without cause prior to the End Date, Mr. Parks will be paid the entire amount of the Retention Bonus.

The foregoing description of the Retention Bonus does not purport to be complete and is qualified in its entirety by reference to the Retention Bonus letter agreement, a copy of which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ending July 1, 2017.

About bebe stores, inc. (NASDAQ:BEBE)

bebe stores, inc. designs, develops and produces a range of contemporary women’s apparel and accessories. The Company’s product offering includes a range of separates, tops, dresses, active wear and accessories for a range of occasions. It designs and develops its merchandise in-house, which is manufactured to its specifications and it also sources directly from third-party manufacturers. The Company also offers accessories, which include jewelry, optical, fragrance, shoes and handbags. The Company operates stores in the United States, Puerto Rico and Canada. In addition, it has an online store at www.bebe.com that ships to customers in the United States, Canada, Puerto Rico, the United States Protectorates and internationally via its third-party providers, International Checkout and Shoprunner. It has international stores operated by licensees in South East Asia, the United Arab Emirates, Russia, South America, Turkey and other territories.