Dive Brief:

• Struggling women’s apparel retailer Bebe on Wednesday announced that it’s exploring strategic alternatives and has retained B. Riley & Co. as its financial advisor, according to a company press release.

• Bebe has also engaged a real estate advisor to assist with options related to its lease holdings, the company said. That could entail shuttering all stores and running the company as a pure-play e-commerce shop, Bloomberg reported this week.

• Bebe hopes to accomplish the shift without a Chapter 11 bankruptcy filing, but much depends on its ability to get out of its leases, unnamed sources also told Bloomberg. A request for more details from Retail Dive to the company was not immediately returned.

Dive Insight:

Bebe, founded in San Francisco in 1976 by Manny Mashouf, developed a solid reputation for chic fashion, but hasn’t been the same since the departure of creative director Neda Mashouf, who exited the company after the couple's 2007 divorce. Manny Mashouf was president and controlling investor at the time, and took over again as CEO more than a year ago.

As it’s struggled with declining mall traffic and other headwinds bearing down on apparel retail, Bebe has also faced pressure from private equity investor Consac LLC, whose president, Ryan Drexler, in 2014 began leaning on Bebe to consider a sale or go private, expressing criticism of what he called Manny Mashouf's "questionable" financial holdings.

Bebe's troubles have intensified in recent quarters: Q2 same-store sales fell 10.5%, compared to a 2.5% decline a year ago, as store traffic improvements were inconsistent and inadequate over the holiday period. For the six months ended Jan. 2, same-store sales decreased 7.4%. Q2 net sales were $101.9 million, a decrease of 16.8% from $122.4 million in the same period last year. A tick up in gross margin, which edged up as a percentage of net sales edged up to 34.4% from 34.0% last year (the result of a much-needed reduction in markdowns and promotions), has done little to alter the company’s fortunes.

Store closings have already been part of the retailer's ongoing restructuring efforts, last month announcing plans to shutter as many 25 Bebe and outlet stores in fiscal 2017, which would decrease total store square footage by some 16% in a year. But now Bebe's looking at 100%. Apparel retailers Loehmann’s and Dehlia’s have made similar moves to sell only via the web, a risky one because stores help drive digital sales.

Unlike many retailers in similar positions, Bebe has had some breathing room because it doesn’t have a lot of debt. Last summer the retailer raised some money through a deal with brand management company Bluestar Alliance to develop its wholesale business abroad, where Bebe retains a higher profile than in the U.S.