Guess to transfer Chinese operations to local partner

Guess plans to transfer its operations in Greater China to a local partner this year as part of its restructuring strategy.

“After many years of running our own direct operations in Greater China, we believe there is an opportunity for this market to be directly developed and managed by a local, highly experienced partner,” said CEO Carlos Alberini.

“We have already met several potential candidates for consideration and we expect for this transition to be completed before the end of this fiscal year.”

In addition, the retailer plans to streamline its Guess full-price store portfolio in North America by exiting non-strategic, unprofitable locations.

Alberini explained that the company is focusing on increasing direct-to-consumer sales productivity globally and improving profitability through business and portfolio optimisation.

For the fourth quarter ended February 1, Guess reported a 5 per cent increase in revenues to $932.3 million, driven by the Rag & Bone acquisition, positive momentum in the wholesale business, and increased licensing revenues.

In the Americas, retail sales were up 4 per cent while wholesale revenues soared 63 per cent. Europe revenues increased 2 per cent and Asia revenues fell 15 per cent. Licensing revenues were up 18 per cent.

GAAP net earnings for the period dropped 29 per cent to $81.4 million, including a net $18.9 million unrealised loss due to the change in fair value of the derivatives related to the company’s convertible senior notes due 2028.

For the full year, sales grew 8 per cent to $3 billion and adjusted net earnings decreased 40 per cent to $104.5 million.

“During the year, we delivered solid results with our licensing segment and our wholesale businesses in Europe and the Americas, but missed our plans for our direct-to-consumer business due to slower customer traffic in North America and Asia,” commented Alberini.

For FY26, the retailer expects net revenues to increase 3.9-6.2 per cent. It forecast a loss of $30-35 million in the first quarter and earnings of $133-165 million for the full year.

In a separate announcement, Guess said its board has established a special committee to review the non-binding takeover offer from WHP Global.

“The special committee is carefully evaluating and considering WHP Global’s proposal with the assistance of its financial and legal advisors and has not yet determined whether it is appropriate to pursue the proposed transaction or any other transaction,” the company stated.