A BELOVED retailer will shutter at least 20 stores this year as part of adjustments to improve its financial standing.
The locations were not getting enough customers in and out the door as they had before, leading to the need for the closures.
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At least, that’s what Guess CEO Carlos Alberini told investors during an earnings call earlier this month.
“We expect to reduce our North American store fleet by roughly 20 stores by the end of the year,” Alberini explained.
He added that some of the 20 were coming up to their “natural lease end” anyway, so Guess would simply not be renewing it.
“Traffic declines into our retail stores have persisted,” the CEO added.
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Data from Placer.ai showed that foot traffic at Guess stores in New York alone took a 40% downturn in February.
Guess was founded by the Marciano family in 1981 and quickly became known for its affordable luxury fashion offerings.
Denim pants quickly skyrocketed Guess into consumer popularity after the three-zip Marilyn design was worn by celebrities and seen on Michael J Fox in 1985’s Back to the Future.
The retailer later partnered with Drew Barrymore, Jennifer Lopez, and several others for ad campaigns.
CLOSING TIME
While it continued to operate hundreds of locations, many within malls, throughout the United States for decades, the height of the coronavirus in 2020 put Guess in a tough spot it’s still trying to recover from.
Over the past five years, it’s shuttered at least 100 stores, per Business Insider.
The additional 20 for this year only add to the mass closure list, leaving around 200 brick-and-mortar stores remaining for Guess after they’re gone for good.
No closure dates or addresses for the 20 affected Guess locations have been released as of yet.
Alberini also plans for the shutdowns to contribute to freeing up a $30 million uptick in operating profit by 2027, which would also include a move to a new operator outside of China, where it’s conducted business directly for years.
The CEO said the brand seeks a “local, highly-experienced partner.”
US braces for ‘45,000 store closures’
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
He also said there were ongoing conversations with “several potential candidates.”
PARTNER POTENTIAL
This also comes as it moves forward with a partnership offer from WHP Global.
WHP Global notably has brands like Toys R Us, Vera Wang, and Anne Klein under its umbrella and wants to put a $663 investment into Guess, as noted in a March 17 news release.
As part of the deal, WHP Global would have a 57% majority stake in Guess’ stock, with 43% remaining for the co-founders and Alberini.
During the April earnings call, Guess confirmed it appointed a special board committee to continue considering the acquisition proposed by WHP Global alongside financial and legal advisers.
WHP Global and Guess have worked together closely before, as around one year ago the companies collaborated to acquire designer bag brand Rag & Bone.
Guess put in $51 million and saw about a 13% earnings boost by December.
Mall-based retailers and even fast-fashion brands, in general, have been taking hits this year as e-commerce reigns in appeal to many consumers with competing companies like Shein and Temu.
Forever 21 recently filed for Chapter 11 bankruptcy protection for the second time since 2019, and will shutter all its remaining stores.
Express also submitted its filing last April, closing 100 locations.
