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Shares of Guess?, Inc. GES surged nearly 30% on Monday after the company announced it received a non-binding acquisition proposal from WHP Global through its affiliate, WHP Investments, LLC. The proposal suggests acquiring Guess? for $13 per share in cash, excluding shares held by specific existing shareholders like Paul Marciano, Maurice Marciano, and Carlos Alberini. The deal would be financed through a combination of equity, third-party debt and the rollover or reinvestment of shares by the Proposed Rollover Shareholders.
In response to the offer, Guess? has formed a special committee to assess the proposal with the help of financial and legal advisors. The committee’s goal is to determine the best course of action that aligns with the company’s long-term interests and benefits its shareholders. However, it’s important to note that there is no guarantee that a final agreement will be reached or that the proposed acquisition will be completed.
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What Else Should You Know About GES?
Guess? and WHP Global joined forces in April 2024 to acquire the intellectual property and operational assets of a well-known fashion brand, rag & bone. As part of this collaboration, Guess? now manages rag & bone stores in the United States and the U.K., while expanding the brand's presence in high-end boutiques and global e-commerce platforms.
Recently, Guess and WHP Global, co-owners of the New York-based fashion brand rag & bone, entered into a five-year licensee partnership with Signal Brands. This agreement focuses on expanding rag & bone’s handbags and small leather goods category, leveraging Signal Brands’ extensive expertise in fashion accessories and its global distribution network. This new partnership marks a significant step in rag & bone’s global expansion. By working with an experienced partner, the brand aims to strengthen its presence in the luxury accessories market.
Despite its growth initiatives, Guess? is navigating a complex consumer environment characterized by evolving purchasing behaviors, economic pressures and regional disparities. Macroeconomic factors like inflation and economic uncertainty are compelling consumers to prioritize value-driven purchases. This trend has created challenges for Guess?'s premium pricing strategy, with the company acknowledging the need to reassess pricing and promotional activities to remain competitive in key markets.
At present, Guess? carries a Zacks Rank #3 (Hold). GES’ shares have lost 10.6% in the past three months compared with the industry’s decline of 16.2%.