Guess Inc.’s latest update offered a glimpse well into the future of the denim firm’s aspirations to create the next American fashion powerhouse.
Carlos Alberini, CEO of the Los Angeles company, has mentioned the Guess Inc. platform as the backbone to ramping growth of in-house and other brands. The completed acquisition of contemporary label Rag & Bone, along with the launch of Guess Jeans offers greater clarity on that strategy.
“We have built a platform that can power a bigger and broader business, generate synergistic growth and margin expansion and deliver significant value creation over time,” Alberini said last week during the company’s quarterly earnings call, adding Guess has reached an inflection point.
The executive confirmed there’s interest in using Guess Inc.’s network of licensees, along with retail, marketing and manufacturing expertise to grow existing brands, stand up new ones or continue with more acquisitions.
In a nutshell, Alberini said, “We know that with our capabilities, we can do more.”
He tempered that by saying management isn’t identifying new brands to launch or acquire currently, calling such moves “super premature.”
Instead, the company is focused in the near term on continuing the Rag & Bone group’s integration and accelerating the path of Guess Jeans.
“We want this to be successful before we think about the next one and the next one,” Alberini said.
Rag & Bone: Retail, Product Ramp
Rag & Bone, which marked Guess’ first-ever acquisition, has a large runway for growth.
Guess isn’t breaking out the financial performance of its brands, but executives last week confirmed the label is performing in line with expectations.
“We have a lot to do,” Alberini said of Rag & Bone. “We see two huge opportunities. One is to really increase the product assortment that the company has operated with. And the second big thing is about making this brand global and just bringing more [stores] into the international landscape.”
More specifically on the second front, the company is eyeing “key cities” in Europe.
“The great thing is that this company did not have full access to capital in the past under the previous ownership and we think that we can provide that,” Alberini said. “So, there is a lot more flexibility to move into that type of expansion, but we are going to go slowly.”
Guess Jeans’ Big Start
The newly launched Guess Jeans has been going at a pace that’s been anything but slow.
Alberini teased the brand last year, and it’s now completed its first round of market showings to buyers.
“While it hearkens to the legacy of the Guess brand, Guess Jeans is a completely new lifestyle brand with its own identity and multi-category assortment,” Alberini said. “It employs a brand-new store concept with its own marketing strategy and advertising campaigns targeting the younger Gen Z customer, but welcoming all customers.”
The wholesale launch was complemented with the rollout of a new ad campaign for the public. The new creative was led by Nicolai Marciano and featured Jude Law’s daughter Iris Law.
Guess Jean is also positioning itself as an eco-conscious brand, touting a more sustainable stone washing process trademarked by the company as AirWash. The brand’s stores will also incorporate sustainable materials.
Among retail partners, the brand is already off to a big start in Europe having launched a pop-up shop at Galeries Lafayette’s Paris Haussmann store.
This month Guess Jeans will have a special installation within La Rinascente’s Corso Vittorio Emanuele flagship in Milan.
“The brand is already ahead of expectations with wholesale accounts showing great enthusiasm for the brand and product,” Alberini said.
The companywide updates came as Guess Inc. capped its fiscal first quarter ended May 4 with net revenue in constant currency rising 7 percent to $591.9 million. The company reported a net loss, excluding certain costs associated with the Rag & Bone purchase, of $13.8 million. That compared to a net loss of $3.5 million in the year-earlier period.
Guess reiterated previously stated revenue guidance for the fiscal year of more than $3 billion, which would be a new record for the company.
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