Guess? is considering a buyout proposal from brand management firm WHP Global — which owns the Toys ‘R’ Us and Babies ‘R’ Us brands as well as a stake in Express and Bonobos — that would take the lifestyle brand private.
The two companies aren’t strangers: In 2024, Guess? and WHP teamed up to acquire the intellectual property and operating assets of New York-based fashion brand Rag & Bone. Through that deal, Guess? acquired all of Rag & Bone’s operating assets and took over operation of the brand’s stores in the U.S. and UK as well as its wholesale arrangements and ecommerce operations. Guess? and WHP Global jointly own Rag & Bone’s intellectual property.
Despite Rag & Bone Deal, Guess? Share Price Lags
The Rag & Bone deal was a boon to Guess? in its Q3, which ended Nov. 2, 2024. Revenue grew 13% compared to the same period the previous year, growth that CEO Carlos Alberini said was driven primarily by the Rag & Bone acquisition alongside “modest growth” in the company’s core businesses.
Guess? currently directly operates 1,057 stores, with partners and distributors operating an additional 541 stores across 100 countries. Guess? products also are distributed at department and specialty stores around the world.
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While the company’s European business was strong in Q3, Alberini highlighted challenges for the brand in North America and Asia that he attributed to a slowdown in DTC traffic. As a result, the company lowered its guidance for Q4. The company’s share price saw steady declines throughout 2024.
Guess? Forms Committee to Consider WHP Offer
The non-binding proposal from WHP offers to buy all outstanding shares of Guess? for $13 per share in cash, a slight premium on the $9.70 shares were trading at market close on March 14. Shares in the company have bumped up slightly in early trading on the news of the proposal, to a little over $12.
WHP’s proposal doesn’t include any changes to the strategic and operational position of the company beyond removing it from the public markets. The deal also would not include shares owned by certain existing shareholders, including those of Guess? Co-founders Paul and Maurice Marciano and Guess? CEO Carlos Alberini.
Guess? has formed a Special Committee of “independent and disinterested” directors to evaluate the proposal with the assistance of outside financial and legal advisors, and the company said it does not intend to comment any further on the proposal until that evaluation is complete.
