BusinessWeek.com - Europe - Nov 11, 2009Guess?, Inc. (GES)
-
Christine Chen
at
Needham & CompanyThe European bounce began after 2005, when, after years of lackluster performance in the Old World,
Guess acquired an Italian company to which it had previously licensed its European jeanswear business. "We lost control of the
Guess product and brand integrity under our licensee," Paul Marciano says. Under direct management, European sales have soared since then from $43 million to $719 million, now accounting for more than one third of the company's $2.1 billion in global sales. The Marcianos want to open more company owned retail stores in Europe to decrease their reliance on sales through other retailers, which now account for 80% of European sales (In the U.S., by contrast, only 20% of revenues are via wholesale distribution.)
Guess is keen to move more merchandise through company owned stores to save on markups and gain tighter control over the brand.
The company learned that lesson early this decade in the U.S., says Christine Chen, a senior retail analyst at San Francisco brokerage Needham , when it was overexposed and performing poorly.
Share:
The European bounce began after 2005, when, after years of lackluster performance in the Old World, <span class="company">Guess</span> acquired an Italian company to which it had previously licensed its European jeanswear business. "We lost control of the <span class="company">Guess</span> product and brand integrity under our licensee," Paul Marciano says. Under direct management, European sales have soared since then from $43 million to $719 million, now accounting for more than one third of the company's $2.1 billion in global sales. The Marcianos want to open more company owned retail stores in Europe to decrease their reliance on sales through other retailers, which now account for 80% of European sales (In the U.S., by contrast, only 20% of revenues are via wholesale distribution.) <span class="company">Guess</span> is keen to move more merchandise through company owned stores to save on markups and gain tighter control over the brand. <span class="sent"> The company learned that lesson early this decade in the U.S., says <span class="analyst">Christine Chen</span>, a senior retail analyst at San Francisco brokerage Needham , when it was overexposed and performing poorly. </span>...Under direct management, European sales have soared since then from $43 million to $719 million, now accounting for more than one third of the company's $2.1 billion in global sales. The Marcianos want to open more company owned retail stores in Europe to decrease their reliance on sales through other retailers, which now account for 80% of European sales (
Tweet this