GUESS MAPS STORE GROWTH
Byline: Kristi Ellis
LOS ANGELES — Coming off six consecutive quarters of strong sales, Guess Inc. executives revealed plans at the firm’s annual meeting Monday to expand the firm’s retail division with more stores and larger formats .
Maurice and Paul Marciano, co-chairmen and co-chief executive officers, told about 50 shareholders assembled at the Ritz Carlton in Marina Del Rey that Guess plans to open 60 new stores in the U.S. and Canada this year, add 500 in-store boutiques to an existing 1,200 and increase square footage by 25 percent in selected full-price stores.
“The retail division will be the primary growth vehicle this year,” said Paul Marciano, noting that retail sales increased 34 percent to $299 million last year while comp-store sales gained 27 percent.
Guess currently operates 167 stores, including 94 full-price units, 56 factory outlets and 17 stores in Canada. The company plans to open 25 full-price stores, 10 factory outlets, 10 children’s stores and 15 Canadian units this year.
The firm previously reported a 34.3 percent surge in first-quarter earnings to $15.4 million on a 46.3 percent sales increase to $188.8 million.
Retail sales jumped by 44.4 percent, excluding Guess Canada, in the first quarter, while comp-store sales increased 19.2 percent.
This followed a year when profits surged 106.7 percent to $51.9 million and sales gained 27.1 percent to $599.7 million.
Paul Marciano also told shareholders the company will focus on its e-commerce site and newly launched business-to-business Web site, the Apparel Buying Network, located at apparelbuy.com.
In an interview after the meeting, Maurice Marciano said Guess will add 8,000 to 10,000 square feet to full-price stores averaging 5,500 square feet and pulling in between $550 and $600 per square foot.
He said the second quarter “is very much in line” with the results of the first quarter. “We should have positive comp-store sales in May,” he added.
Although the company outperformed the financial community’s first-quarter expectations, as was previously reported, its stock slipped last week by 34.4 percent due to concerns about higher inventory levels.
In trading on the New York Stock Exchange Monday, Guess shares closed at 17 15/16, up 1/8.
Maurice Marciano addressed the recent decline.
“I think it was a combination of concerns about higher inventory levels and Goldman Sachs’ downgrading of all retail across the board,” he said.
“That made the market very nervous. Considering the growth of the company, we just have to prove to the market that our growth is very sustainable, and that’s what we are going to do.”