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- Guess Inc. Receives Buyout Offer from WHP Global: Los Angeles-based denim brand Guess Inc. has received a $13 per share acquisition proposal from WHP Global, marking a potential end to the Marciano family’s ownership.
- Strategic Shift Amid Expansion Goals: A buyout contrasts with Guess’ recent strategy of expanding as a multi-brand fashion powerhouse, following its joint acquisition of Rag & Bone with WHP Global.
- Retail Footprint & Future Prospects: If accepted, WHP Global would inherit 1,057 Guess-owned storesworldwide and 541 licensed locations, adding to its portfolio of 14+ brands with $7B in retail sales.
Los Angeles denim company Guess Inc. has received a $13 per share offer from brand management firm WHP Global in a deal that would end the Marciano family’s run as owners of the business they founded in 1981.
WHP Global’s offer equates to $865.9 million and would be financed through equity and debt. The offer price reflects a 34 percent premium over what the company’s stock closed at on Friday.
Investors appeared to like the news, sending Guess shares up nearly 30 percent in early morning trading Monday to $12.46 per share. The company had a recent market cap of $642.4 million.
Guess said it hired advisors and formed a special committee to evaluate the offer.
“There is no guarantee that any definitive offer will be made, that any agreement will be executed or that the proposed transaction in the proposal or any other transaction will be approved or completed,” the company said in a statement. “Guess does not intend to comment further on this matter until the special committee has completed its evaluation of the proposal or until further disclosure is deemed appropriate.”
Testing the Water?
Guess and WHP Global teamed last spring to go in on the purchase of New York-based Rag & Bone in what marked the denim company’s first-ever acquisition. The two companies hold equal parts in a joint venture that owns Rag & Bone’s intellectual property. Meanwhile, Guess owns the operating assets of the contemporary brand.
A deal doesn’t exactly fit with the strategy Guess has been touting to investors since the April 2024 Rag & Bone buy, which is to build the next great American fashion powerhouse. In that scenario, Guess Inc. acts as the platform operator from which multiple brands can expand by leveraging the company’s operational prowess.
Rag & Bone was a good test of that and is seen as the main growth driver for the business with Executive Vice President of Finance Dennis Secor saying at the ICR conference in January it will provide the “lion’s share of this year’s growth” for the company.
Rag & Bone generated $250 million in 2023 revenue and earnings before interest, taxes, depreciation and amortization of $18 million.
There’s also the company’s Guess Jeans label, which was fully conceived in-house and spearheaded by co-founder Paul Marciano’s son Nikolai Marciano.
Should any offer be accepted, WHP would also take on a sizable fleet of physical retail. Guess currently owns 1,057 stores globally, with licensees operating another 541 doors.
WHP Global has a portfolio of over 14 brands and more than $7 billion in retail sales. Its most recent move was closing on the purchase of Vera Wang’s intellectual property in January.
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