Maybe the folks at Unilever (NYSE:UL) realized it first, when they launched their "Campaign for Real Beauty" Dove soap ad campaign back in 2005. Or maybe Kohl's (NYSE:KSS) was ahead of the game by signing Daisy Fuentes in 2003 to design a clothing line that would appeal to "women with curves."
Whomever first saw the trend and acted on it, it seems that the appeal of the full-figured woman has moved into the mainstream these days. That might spell trouble for bebe (NASDAQ:BEBE), since the fashion retailer seems to cater more to women with the physique of Paris Hilton than, say, Jennifer Lopez.
Check out most fashion mags -- or runway models, for that matter -- and you'd think bebe was still in the thick of the fashion frenzy. While "heroin chic" is no longer considered haute couture, the superslim model is still the epitome of what women are supposed to aspire to. Or at least, it was. This past March, Vogue magazine -- one of the fashion world's style leaders -- had voluptuous actress Jennifer Hudson on its cover, coincidentally coinciding with the runways in Milan and Madrid setting weight guidelines for models.
Hudson's far more typical of "real women" than fashion models. According to the National Institutes of Health, the average woman is 5'4" and wears a size 14. The average runway model is 5'11" and a size 0 or 2. bebe is selling clothes that top out at around a size 12, with most of its styles grouped much lower.
That might help explain the popularity and growth of Lane Bryant and the plus-size brand of Charming Shoppes (NASDAQ:CHRS), as well as Dress Barn (NASDAQ:DBRN). Fellow Foolish commentator Jeremy MacNealy recently noted that despite this being the year of the dress, bebe got dressed down.
Dress Barn's sales have been generally strong this current quarter. In May, its same-store sales rose 10%; they were up 2% in June, and up 3% in July. Charming Shoppes, though it reported reduced guidance for the full year, has seen its plus-sized business do an outsized job of carrying the company up till now. Lane Bryant was slightly up; Catharine's, another plus-size concept, saw comps rise 5% last quarter; and Fashion Bug saw its bigger business grow 7% over last year.
Compare that to bebe, which saw comps drop 5.4% in June, following a 3% decline in May. Same-store sales had fallen some 9% in April, too. This just hasn't been a very good year at all for the retailer. While we may wonder whether internal strife has torn bebe asunder, it may also be that bebe's clothes, however sleek and sexy, are no longer in the fashion forefront.
Other factors might be at work here, too. For one thing, bebe's clothes might be too trendy. Sure, they appeal to the immediate needs of the company's 21-to-35-year-old female customers, but in a few months' time, those new wares are old news, and it's time for a new set of garments. Unfortunately, bebe's merchandise ain't cheap. Staying on top of such fashion trends is tough, and it can be even tougher when demographic trends move against you.
I like bebe's style, and I think the clothes look great at clubs. It's just that the trend may be turning against bebe here, as catering to "real women" becomes more fashionable. That could also mean that bebe's stock is facing some dangerous curves ahead.
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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool's disclosure policy looks great at any size.
