Shares of troubled fashion retailer Guess? (GES) soared 30% yesterday after receiving a buyout offer from brand management firm WHP Global. The once-iconic fashion trendsetter, which is credited with helping to launch the designer jeans trend in the 1980’s, received an offer of $13 per share to take the company private. WHP Global will keep the business running as is without operational or managerial change.
GES stock had ended last week at $9.70 per share, a near-60% decline from its 52-week high, but closed at $12.62 per share on Monday after announcing the offer. Guess? says it is establishing a special committee of independent directors to consider the proposal.
Launched in 1981 by the Marciano brothers, Guess? rose to the top of the fashion world by ushering in the fashion denim wear era, along with peers such as Jordache. Famous for its stonewashed, slim-cut jeans, Guess Girls including models Claudia Schiffer and Anna Nichole Smith rose to prominence.
Yet it has been a long time since designer jeans and Guess? were a force to be reckoned with in retail, and the apparel company has seen its fortunes decline. Fiscal Q3 results reported in November showed slowing customer traffic caused it to swing to a loss and the retailer cut its full-year by more than 50%. Guess? is scheduled to report Q4 results on Wednesday, Mar. 18.
GES stock reached its highest level in over a decade in April 2024 when shares peaked at almost $31 a share, but has steadily declined since then. Guess? has been unable to attract customers to its stores, and blamed a promotional environment and higher costs such as freight and taxes for weighing on performance.
Other retailers, including Abercrombie & Fitch (ANF) and Nordstrom (JWN) – which is also going private – have fared better and have raised their guidance.
Guess? previously partnered with WHP Global to acquire the intellectual property and operating assets of New York-based fashion brand rag & bone. The brand management firm owns other well-known brands including Toys ‘R’ Us, Vera Wang, Express, and Bonobos.
