Guess Acquires European Licensee

Guess Inc. is getting back its European jeanswear licensee in a move that will boost its bottom line next year by $100 million in wholesale business.

LOS ANGELES — Guess Inc. is getting back its European jeanswear licensee in a move that will boost its bottom line next year by $100 million in wholesale business, said Maurice and Paul Marciano, the firm’s co-founders.

Guess’ wholly owned subsidiary, Guess Italia SRL, has agreed to acquire 90 percent of assets and shares of Maco Apparel SpA, the Florence-based licensee of Guess jeanswear for women and men in Europe. The announcement is expected to be made today.

Maco is the joint venture formed by Guess and Fingen Apparel B.V.T. in July 1997 to produce and distribute Guess jeanswear and operate stores throughout Europe. Fingen is the manufacturing division of Gruppo Fratini, a licensee of Calvin Klein and Cotton Belt. Guess Inc. owns the remaining 10 percent of Maco.

Paul Marciano, who with his brother is co-chairman and chief executive officer, said that the acquisition, expected to close Jan. 4, “will give us even more consistency of the product line between the U.S. and Europe.”

He declined to reveal the purchase price for the transaction between the two private companies. The deal includes control of Guess doors in Rome, Milan, Paris, Amsterdam and London.

In an interview last month with WWD, the Marcianos highlighted Europe as the company’s fastest-growing territory, with sales up 25 percent last year and projected to rise another 25 percent in the next year.

There are 24 freestanding licensed Guess stores in Europe and 19 on the way, including shops in Budapest, Prague, Barcelona, Istanbul and Warsaw in the next 18 months.

With the acquisition, Paul Marciano said he anticipates the increment in wholesale volume to account for about 15 percent of the company’s business in the first year.

The price tag for jeans runs steeper in Europe. In dollars, Guess jeans there are retail priced at $110 to $210 compared with U.S. prices of $79 to $148.

Focus Europe is Guess Inc.’s other licensee there, manufacturing and distributing its sportswear. That relationship remains intact, said Marciano. The Maco deal, he added, “is just an opportunity that came up and it was a natural to consolidate Europe with the rest of the U.S.”

This story first appeared in the October 15, 2004 issue of WWD.  Subscribe Today.

About 6 percent of Guess Inc.’s overall revenues are derived from licensing; 22 percent comes from wholesaling, and the rest, from its retail operations.

The acquisition comes as the company introduces its new division, Marciano, domestically, as well as a retail concept devoted to its lucrative accessories category.

Last month, Standard & Poor’s, the credit-rating agency, boosted its outlook on Guess Inc. to stable from negative, based on the company’s improved financial performance. S&P affirmed its BB- corporate rating.

Guess Inc. shares on Thursday closed at $16.54 in New York Stock Exchange trading.