Guess Inc. has scooped up Rag & Bone in what marks the denim company’s first ever acquisition.
Los Angeles-based Guess is set to become the owner of New York-based Rag & Bone’s 34 U.S. stores and two U.K. doors as part of an agreement that brings the contemporary brand’s operating assets into the denim group’s fold. Meanwhile, Guess and WHP Global will own Rag & Bone’s intellectual property.
New York brand management firm WHP’s portfolio includes Joe’s Jeans, Bonobos, Anne Klein, Joseph Abboud, Isaac Mizrahi and Express among other businesses.
“We are excited to add an iconic brand such as Rag & Bone to Guess, further diversifying our portfolio with complementary customer bases and price points,” Guess CEO Carlos Alberini said in a statement on the deal. “We look forward to partnering with WHP Global to build on Rag & Bone’s heritage. Guess has an incredible platform with a strong global distribution network and outstanding licensee partners that will enable us to power the growth and expansion of the Rag & Bone business. We expect the transaction to deliver earnings per share accretion in the first year and strong value creation for our shareholders for years to come.”
Guess will pay $56.5 million as part of the deal. It’s unclear how much WHP is investing in the acquisition.
A 50/50 joint venture between Guess and WHP will own the intellectual property. Guess will then pay the JV licensing fees to make and sell Rag & Bone product.
“Rag & Bone is a brand I have always loved and respected,” Guess co-founder and Chief Creative Officer Paul Marciano said in a statement. “It is a brand well known for its preeminence in American fashion that over the years has stayed true to its roots and founding values, with an unwavering commitment to quality and authenticity. This acquisition is the first one in the 43-year history of Guess, and I am thrilled to welcome Rag & Bone to our family. I look forward to working with Andrew Rosen and the talented team at Rag & Bone to pursue the brand’s product and market expansion internationally.”
‘New Chapter’
Last year Rag & Bone generated revenue of about $250 million with adjusted EBITDA of $18 million.
Theory founder Andrew Rosen currently serves as Rag & Bone chair and has been helping oversee the business.
In July co-founder Marcus Wainwright stepped away from his role as chief brand officer. He had been leading the company since the departure of former Nike executive Stefanie Strack, who stepped down from the top spot in 2018 after less than a year in the role.
COO Nicolas Vermot handles the day-to-day duties, with Rosen a very hands-on chair, according to a report by WWD at the time of Wainwright’s departure.
Like Guess, Rag & Bone is rooted in denim. Founded in 2002 by Wainwright and David Neville, it evolved beyond those roots into a full-fledged contemporary brand to include men’s and women’s apparel, accessories and footwear.
“Today marks the beginning of an exciting new chapter as Rag & Bone joins forces with a much larger international fashion company,” Rosen said. “It’s a great opportunity for our team to take the brand to the next level, blending our unique styles and respective expertise to create new possibilities for Rag & Bone on a global scale.”
Rag & Bone, Guess Synergies
Guess over the years has inked deals with a number of licensing partners, with WHP also adept in the world of licensing. The companies’ expertise is expected to help Rag & Bone quickly enter new categories and markets.
Rag & Bone is set to remain headquartered in New York once the acquisition is finalized. The deal is expected to close sometime during Guess’s fiscal first quarter.
For Guess Inc., the deal follows its push to build out the casual business through Guess Jeans after spending the past few years refining the assortment of its namesake Guess label.
The new Guess Jeans brand is led by Nicolai Marciano, with a heavy focus on sustainable denim practices and an eye for the Gen Z consumer.
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