Guess Inc. sees huge opportunities ahead for its Rag & Bone business, but its Guess Americas retail component failed to meet company expectations due to softer consumer spending in the second quarter.
“We are extremely pleased with how the business performed and how the assimilation of the business onto our platform is progressing,” Guess CEO Carlos Alberini said during an investor conference call following the posting of second-quarter results. He said the brand contributed solid growth for the company and that results were “driven by a great performance of the wholesale business, which experienced strong demand of new product in key categories from multiple customers.” In contrast, Alberini said the direct-to-consumer business came in “slightly below” company expectations.
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Paul Marciano, co-founder and chief creative officer, said in a statement that the company has already started adding product categories to the Rag & Bone portfolio and has plans to “accelerate store openings both domestically and abroad.”
Alberini said the company is also increasing its marketing investments to support the international expansion of its brands, including the new additions to its portfolio, Guess Jeans and Rag & Bone.
The investments for Rag & Bone include new markets across Europe outside of the U.K. where the brand isn’t as well known. One other development as the company hunts for retail locations is the signing of a lease for a store in Amsterdam, Alberini said. “In addition to Europe, we are in discussions with potential partners to represent the Rag & Bone brand in other new markets, including Mexico, Latin America, Middle East and Australia,” the CEO said, adding that it is working with WHP to explore other licenses for products and territories. Guess disclosed in February that it would acquire the operating assets of the New York-based jeans brand, and that the brand’s intellectual property assets would be placed in a 50-50 joint venture controlled by Guess and WHP Global, the brand management firm headed up by Yehuda Shmidman. Rag & Bone chairman Andrew Rosen and his team joined Guess following the closing of the transaction.
In other growth news, Alberini said the wholesale business for its new Guess Jeans brand, headed by Nicolai Marciano, “is off to a strong start.” The new lifestyle brand targeting Gen Z men and women, with its casual offering and “compelling price points,” saw the opening of two stores in the quarter, one in Amsterdam and the other in Berlin. According to Alberini, Guess Jeans hosted a weekend event at Coachella that garnered “billions of impressions and millions of views,” adding also that the first Guess Jeans sales campaign delivered orders well ahead of company expectations.