How Guess Will ‘Reclaim Our Denim Legacy’
The new Guess Jeans brand that launched at Pitti Uomo this week will hit the market later this year. Parent company Guess Inc. is bullish on growth opportunities not just from the hot-off-the-presses men’s label but potential acquisitions and a renewed focus on developing outerwear in-house.
Executives from the Los Angeles company believe Guess Jeans will drive new revenue growth this year, they said during a fireside chat at the ICR Conference on Monday at The Ritz-Carlton Orlando, hosted by Jefferies specialty retail analyst Corey Tarlowe.
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Guess Jeans targets young millennial men and Gen Z customers, using sustainable components and denim finishing technologies from Jeanologia to create clothing for the business casual officewear movement. Guess is showcasing the new brand in a special exhibition at the Pitti Immagine Uomo trade show in Florence from Jan. 9-12.
“[The] Guess Jeans launch is a plan to reclaim our denim legacy and a potential for our global business, and it will be developed on a multi-channel basis,” said Markus Neubrand, chief financial officer for the denim-minded company. “The price points will be competitive. I think that’s…the one important part of the Guess Jeans brand. And we intend to have a robust celebrity marketing strategy to support that brand development,” as well as a new visual identity and store concept, he added.
Neubrand said Guess Jeans already has one U.S. store in the works. “We’re very excited about this long-term opportunity,” though “it will take some time to root,” he admitted.
Executive vice president Dennis Secor said the company sees organic growth opportunities in current and new markets. The company reclaimed its outerwear license and developing new products in-house, Secor said. These efforts should bear fruit in fiscal 2025, he added.
“We have the full tool kit,” Secor said of the company’s management and operating strength.
“We run a global platform with business in about 100 different countries, and roughly, three quarters of that business is outside of the United States. We have broad distribution capabilities through our own 1,000 plus retail stores, full priced and outlet as well as e-comm and through our wholesale partners with many different sizes and operating models,” Secor said. Guess Inc. wholesales in large department stores, mom-and-pop shops, and concessions.
“We see ourselves as a platform with broad capabilities to support a much larger business,” Secor said, noting that company’s licensing partners in 25 product categories. “And we also see opportunities to further leverage the platform with potential brand acquisitions down the road.”
In a research note Tarlowe maintained Jefferies “Hold” rating on shares of Guess stock with a price target of $24. Shares of Guess are trading in the range of $23. Recognizing Guess as a leading global apparel brand, Tarlowe said improved inventory levels “alongside the upcoming brand launch could serve as top-line and margin drivers in 2024.” The rating reflects concern for softer consumer demand in 2024 due to a volatile macro backdrop, margin reversion and possible weaker wholesale performance driven by cautious consumer order patterns.
Founded in 1981 by the Marciano brothers, 2024 marks the global lifestyle company’s 43rd year in business. In October, Guess took the No. 1 spot on the Top 25 Companies in Los Angeles List published by The Business Report, a digital publication for entrepreneurs, executives and investors.
