LOS ANGELES — Guess Inc. said Monday that it had acquired the controlling interest in the Italian and Spanish licensees that produce the Guess by Marciano contemporary brand for 17.1 million euros, or $22.6 million.
In addition, Guess said founding brothers Maurice and Paul Marciano would no longer share the chief executive officer and chairman titles, as they have for the last eight years. Maurice has been named chairman, and Paul, vice chairman and ceo.
Both moves are intended to enable Guess, based here, to better control overseas sourcing and boost growth in international markets, especially in Europe, where, in 2004, the company bought back its Italian jeanswear licensee and also posted the biggest gains in its recent earnings report.
The announcement confirmed a WWD report last month.
Guess bought the majority stake in Focus Europe Srl, which holds the license for Guess by Marciano in Europe, the Middle East and Asia, and in Focus Spain SA, which distributes the brand and the Guess line on the Iberian Peninsula. Based on currency exchange rates for Dec. 31, when the deal went into effect, payment includes $13.2 million in cash and $2.7 million in common stock. The purchase also includes the assets and leases of four Guess by Marciano stores in Italy. Guess has the option to buy the remaining 25 percent in Focus Europe by 2011.
Carlos Alberini, Guess’ president and chief operating officer, said acquiring the stakes in Focus Europe Srl and Focus Spain SA would enable the company to reach between $600 million and $800 million in European sales over the next three to five years. He added that, in the 12 months ended in September, the European business posted 25.6 percent operating profit margins with earnings of $59.4 million and revenue of $232 million.
Alberini said the new executive titles would allow Maurice Marciano to focus on strategy and brand building while Paul Marciano spearheads global expansion. “Europe is a major driver for us for growth because the profitability is so significant there,” Alberini said.