Guess (clothing)

Guess, Inc.
Public
Traded as NYSE: GES
Industry Fashion
Founded 1981
Founders Paul Marciano
Maurice Marciano
Headquarters Los Angeles, California, U.S.
Number of locations
484 (April 2011)[1]
Key people
Paul Marciano, Executive Chairman of the Board and Chief Creative Officer
Maurice Marciano, Director and Chairman Emeritus
Victor Herrero, CEO
Products Clothing
Revenue Increase $1.19 billion (2006)[2]
Increase $123.2 million (2006)
Number of employees
14,600 (2014) [3]
Website www.guess.com

Guess (styled as GUESS or Guess?) is an American upscale clothing brand and retailer. Guess also markets other fashion accessories besides clothes, such as watches, jewelry and perfumes. The company also owns the line Marciano.

Founding

Brothers Paul and Maurice Marciano moved to Los Angeles in 1981 and opened their first store in upscale Beverly Hills area. Guess soon began advertising, and later introduced their iconic black-and-white ads in 1985.[4] The ads have won numerous Clio Awards. Their fashion models have included a number of supermodels, many of whom, such as Claudia Schiffer, Anna Nicole Smith, Eva Herzigova, Valeria Mazza, Kate Upton, Julia Lescova, and Laetitia Casta,[5] first achieved prominence via these ad campaigns.

In the 1985 Robert Zemeckis movie, Back to the Future, Marty McFly (Michael J Fox) wore distinctive Guess denim clothing,[6] reportedly designed specifically for the film.[4]

The Guess emblem with the famous question mark in the center.

During the 1980s Guess was one of the most popular brands of jeans. The company was one of the first companies to create designer jeans. While the first jeans were for women, in 1983 a men's line debuted. In 1984 Guess introduced its new line of watches known as "Guess", "Guess Steel", and the "Guess Collection". The watch line is still in existence today, and has been joined by a number of other accessory sidelines. In 1984, they also introduced a line of baby's clothes, called "Baby Guess". The line is now incorporated with clothing for toddlers and kids called GUESS kids.[4][7]

Guess Home brand

Guess store in the Philippines
Guess in Toronto

In the 1990s, Milica, Aleksia and Milos[8] had a division called Guess Home, which featured youthful, upscale bedding collections (Guess was the first company to package each sheet, duvet and pillowcase pair in packaging actually made from sheeting material, which was a clever way to show what the pattern really looked like) as well as a number of innovative towel collections. By the end of the decade, sales dropped and Guess discontinued their home division.[9]

Slowdown

After Abigail's line in the 1980s the company began to take a downturn during the nineties, as other companies such as Calvin Klein, Diesel, Tommy Hilfiger, and Gap began rising in popularity. Guess' sales suffered, and its stock dropped dramatically.

Improved sales

In the 2000s, the controversy that surrounded the company during the nineties (see below) was largely forgotten. Guess began catching the eye of many teens and young adults during the decade as its marketing ads grew increasingly sexier. Since mid-2003, the Guess stock has continuously risen, eliciting nothing but positive reviews from stock holders and Wall Street, though the wider community has more mixed opinions. Recently, the clothing and accessories company has redesigned itself, offering several new aspects to the company.[10]

Guess store in Century City - Cape Town

Since Guess was looking to make its impact once again on the fashion market, the Marciano brothers called upon hotel heiress and fashion mogul Paris Hilton to feature in a new series of ads.

Today

Guess retail store on the Magnificent Mile in Chicago
Guess showroom in New York City

On January 26, 2001, Guess Inc. restated previous results for fiscal 2000 after deciding to write down impaired inventory.[11] In 2004, Guess celebrated the 20th anniversary of its watch collection, issuing a special-edition Guess watch. The accessories department was also greatly expanded and several stores across the United States were redesigned. Guess also created a lower priced collection sold exclusively through its outlet locations. Guess also introduced its first brand extension, the up-scale female line of clothing and accessories, named Marciano. The line features pricey, runway-inspired styles, and is featured in several retail locations throughout the world, as well as select Guess retail stores.[12]

In 2005, Guess began marketing perfume. The company introduced Guess for Women in the spring of 2005. Guess introduced the Guess for Men line in the spring of 2006. Guess has also continued its Guess Kids clothing line into the 2000s, and in 2006, Guess began promoting the clothing line for girls and boys through its factory retail stores. Guess continues to be guided by the Marciano brothers, as co-chairmen and co-CEOs. Maurice Marciano has overseen the design and its sales growth, while Paul manages the image and advertising. The company operates in many countries around the world with the majority of their stores located in the United States and Canada. Guess has licensees and distributors in South America, Europe, Asia, Africa, Australia, Latin America, and the Middle East. Guess has been proven to be highly successful in South Africa with stores located in almost every major city of the country. Most notably the Guess Century City, V&A Waterfront (Cape Town - Western Cape), Sandton City (Gauteng) and Eastgate Mall (Kwazulu Natal) stores.

In early 2007, Guess introduced a new business concept known as G by Guess. The new brand sought to focus on a target audience similar to Abercrombie's Hollister brand. G by Guess targets men and women of ages 16–23 with more competitive prices and a style that gives a "nod to old Hollywood." Many denim styles are priced within the $40 to $50 range. The new brand is priced similarly to Express, American Eagle and Gap. Guess has already begun heavily promoting the new concept in several cities across the United States. Their stores feature eye-catching displays and presented in a night-club atmosphere.

Around the same time, Guess disabled their Guess Factory website. The outlet website offered similar styles at similar prices as the G by Guess line. The company's factory stores will still remain open at their respective outlet mall locations, however the discount product is no longer available through an online retailer.

In November 2006, Guess introduced their Marciano men's line, which is available exclusively through Guess.com, and select Guess and Marciano retailers throughout the country. As of November 2006 the new men's collection features button up shirts, blazers, and dress pants. In line with the women's collection, the men's line was developed and manufactured in Florence, Italy; and retailed for a higher price. As of January 2007, the Marciano men's line was pulled from Guess? stores due to lackluster sales. The merchandise was marked down, and will be sent to factory outlet stores upon deletion. After the success of the fragrance line which included scents for both men and women, Smesh? introduced two new fragrances. Guess Gold was the latest addition to the women's collection, while Guess Suede was the second installment for the men's fragrance. scents retail for around $50 and are available in several retail locations.

With their Spring 2007 collection, Guess entered a new phase with their GC watch collection. The newest additions are in response to the growing demand for designer watches featuring eye-catching designs, and high-end prices. The new watches help to expand the popular GC collection, and help to separate it from the mid-price watches Guess has come to be known for. Moving away from the traditional steel material used to produce the majority of Guess? watches, the company along with Callanen International, the producer of Guess? watches have introduced gold, silver, and diamonds into the designs. The new products are all Swiss made, and boast a much higher price. The GC men's collection now range between $200 and $1,200, while the women's watches are being sold between $200 and $1,000. TAG Heuer, Dolce & Gabbana, and Fendi all place the highest on Guess's competition with entry level high-end watches.

In 2012, supermodel Claudia Schiffer posed again for Guess black and white ads marking the brand's 30th anniversary.[13]

In 2015 it was announced that founder Paul Marciano was stepping down from his position as CEO. He was replaced by Victor Herrero in August.[14]

Controversy

Sweatshop allegations

Rage Against The Machine's anti-sweatshop poster targeted at Guess?, ca. 1997

During the 1980s, the company's image was damaged when allegations of sweatshop labor use surfaced. Guess was quickly marked as a major offender. In 1992, Guess contractors faced litigation from the US Department of Labor (DOL) due to failure to pay their employees the minimum wage or adequate overtime. Rather than face a court case, $573,000 in back wages were paid to employees.[15][16]

Soon afterward, Guess promised to monitor their contractors for illegal activity, and the company earned a place on the US DOL's 'Trendsetters List', but this position was suspended several years later in 1996 after independent inspectors found violations of regulations at seven of the company's contractors. In the same year the company was sued by the Union of Needletrades, Industrial and Textile Employees (UNITE), again due to the failure to pay the minimum wage or overtime to workers. The settlement, supervised by the US Department of Labor, saw the reinstatement of 8 workers found to have been illegally fired and another $80,000 in back pay given to workers, but almost immediately afterward Guess announced that it was moving its sewing production to Mexico. The company denied that the move was related to these court cases, but its public image continued to suffer.

Throughout the nineties, UNITE continued a public relations campaign against Guess, focusing on the experiences of former employees. Billboards subsequently appeared in Las Vegas, Los Angeles, and New York featuring a photograph of Rage Against the Machine with the caption "Rage Against Sweatshops: We Don't Wear Guess – A Message from Rage Against The Machine and UNITE. Injustice. Don't buy it."[17] Eventually, Guess countered with a defamation suit against Unite and several of its officials, while in 1997 the company ran full-page ads in many major American newspapers claiming that its contractors were "guaranteed 100% free of sweatshop labour". The wording of these ads was changed after federal authorities complained that the claims had not been made by anyone in the government and had no official status. Guess especially began expanding in the less competitive and increasingly lucrative European and Japanese markets.

Restatement

On February 14, 2000, the company restated its figure in income statement of 1999.[18]

"Ski Colombia: Always Plenty of Fresh Powder" T-shirts

In 2005 Guess pulled a line of T-shirts from the market after Erika Becker-Medina , a DC area resident and government employee, spearheaded a campaign calling for the boycott of the company. "Ski Colombia: Always Plenty of Fresh Powder" was designed on the T-shirts released by the company in the second quarter of 2005, apparently in reference to Colombia's drug-trafficking problem. Guess distributed letters of apology.[19]

Lawsuit

April 2015 Designer Georges Marciano has just launched a civil lawsuit for the illegal use of "Guess by Georges Marciano". In his suit, Georges Marciano is demanding for the cessation of production and for the destruction of all counterfeit goods which mention "Guess by Georges Marciano". This comes just weeks after the fashion designer filed a first lawsuit in which he accused Guess Inc. of opposing the trademark "Royal Navy by Georges Marciano", a move that effectively prevents him from using the name "Georges Marciano" in his business. A formal complaint to the police for counterfeit The RCMP has also received an official complaint in this matter after cosmetics for men and women bearing the trademark "Guess by Georges Marciano" were acquired from an online boutique, despite the fact that, in 1993, the founder of Guess had cancelled the "Guess by Georges Marciano" license agreement when selling his shares to his brothers. Hundreds of similar items are available on the Internet, a situation that is all the more surprising since the Guess Inc. brand is well known for its intransigence with regards to similar brands and the counterfeiting of its products. With these measures, Georges Marciano seeks to shed light on the current use of the "Guess by Georges Marciano" brand more than twenty years after rights to its use were rescinded. "I am determined to fight to put an end to the illicit use of my name and recover monies to which I am entitled," asserts Georges Marciano.

1993 Georges Marciano, the former Guess Inc. chairman who presided over the company's long-running and costly feud with a rival jeans maker, is now suing his former firm and his brothers, to whom he relinquished control of Guess in August. The suit is the latest episode in a Marciano family quarrel and could be a prelude to a new business rivalry should Georges Marciano launch a new clothing enterprise. Georges Marciano, who is credited by some with helping to develop the $7-billion-a-year designer jeans business, contends that Guess has infringed on the trademark he owns on the Marciano name and is violating a licensing agreement. The suit, filed Dec. 20 in U.S. District Court in Los Angeles, accuses Guess of trademark violations, breach of contract and unfair competition. Specifically, it contends that Guess is violating the trademark and licensing agreement by selling clothing under the Marciano Collection label without the approval of Georges Marciano. Also named as defendants in the suit are Guess top executives—all brothers of Georges Marciano—including Chairman Maurice Marciano, President Paul Marciano, and Armand Marciano, executive vice president. The family feud is the latest in a series of disputes involving the Marcianos. The brothers became well known for the brutal legal battles they waged with another set of siblings: the Nakash brothers, who founded Jordache jeans. The Marcianos sold half the interest in Guess to the Nakash brothers in 1983 but had that sale rescinded as part of an out-of-court settlement in 1990, ending a six-year dispute that generated legal fees of $80 million. Georges Marciano's suit against his brothers comes within months of a dispute that led to the sale of his 40% interest in Guess to his brothers for $220 million. Georges Marciano reportedly felt Guess should expand its distribution beyond the existing department store customer base to include other retailers—such as Wal-Mart and Sears—and decided to leave the company because of resistance from his brothers. However, the suit says Georges Marciano retained trademark ownership of his name—which is part of the logo on a wide range of Guess products—because he transferred those rights to Georges Marciano Inc., a company founded in 1983. Under an agreement, Georges Marciano has licensed his name to Guess for use on products and for advertising and marketing programs, and that agreement includes the licensing of the Marciano surname, the suit says. The suit contends that the licensing agreement prohibits Guess from associating other new names or characters with the Marciano mark on products or in advertising without the prior approval of Georges Marciano. However, the suit says that Georges Marciano learned in November that Guess was selling clothing under the Marciano Collection label without his authorization. The suit also contends the Guess executives are falsely claiming that Georges Marciano approved the company's new Marciano Collection label. When Marciano decided to leave Guess, he reached an agreement Aug. 23 to terminate the licensing agreement on Aug. 24, 1994, the suit says. Under the agreement, Guess can no longer use the Marciano name on products after that date, according to the suit.

Guess had no immediate comment on the lawsuit, which asks the court to halt the distribution of the new line. Georges Marciano could not be reached for comment, but one of his lawyers, Stephen J. Strauss, said a legal team is trying to determine what level of damages it will seek. Georges Marciano might seek a substantial award from Guess, a $500-million empire that includes the jeans business, a line of women's sportswear, a growing string of posh stores and licensing operations that have placed the Guess name on fragrances, watches and sunglasses. Georges Marciano could seek up to three times the value of the profit from the sale of Marciano Collection clothing, said Anthony M. Keats, a lawyer specializing in trademark infringement cases at the Los Angeles offices of Baker & Hostetler.

References

  1. GUESS?, INC. REPORTS FIRST QUARTER RESULTS
  2. Company Financials
  3. "GUESS? INC (NYSE:GES)". New York Stock Exchange. Retrieved 26 January 2015.
  4. 1 2 3 "Guess, Inc. Company History". Funding Universe. Retrieved February 5, 2012.
  5. Meet New Guess Girl Alyssa Miller!. Teen Vogue.
  6. Interview with Michael J Fox, The Guardian, 11 April 2009
  7. "Guess kids". Retrieved 5 February 2012.
  8. http://www.fundinguniverse.com/company-histories/Guess-Inc-company-History.html
  9. "Guess Profile". Fashion Model Directory. Retrieved 5 February 2012.
  10. "New Guess Concept Store Opens in Europe". Retrieved 6 February 2012.
  11. "Guess? warns of Q4 loss, weaker-than-expected 2001". Dow Jones Reuters.
  12. Sofroina Timmons. "GUESS! Who? GUESS by Marciano!".
  13. Krupnick, Ellie (28 March 2012). "PHOTOS: Claudia Schiffer Returns To Guess For 30th Anniversary". Huffington Post.
  14. "Guess founder Marciano to step down as CEO". LA Biz.
  15. "Guess? What". New Internationalist Magazine. Retrieved 6 February 2012.
  16. "All in the Jeans". Slate Magazine. Retrieved 6 February 2012.
  17. Band timeline
  18. "Guess ?, Inc. Reports 47% Fourth Quarter Revenue Growth".
  19. "Guess Who's Unhappy With the IRS?". Brown & Company. Retrieved 6 February 2012.

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