Guess prepares for denim comeback under new CEO
Following the publication of Guess' latest financial results, CEO Carlos Alberini outlined his strategy for the brand in detail during a conference call with investors. For the fiscal year ended 2 February 2019, the American brand saw its revenues rise 10.4% to $2.61 billion (2.29 billion euros), up from $2.36 billion (2.07 billion euros) in the prior year. The company's new CEO, who took over in January, knows the business well, as he previously served as its president and chief operating officer from 2000 to 2010. In his discussion with investors, he spoke of his intention to double down on the brand's presence in the denim market, and pointed out a series of changes he has observed in the industry over the last nine years.
If Guess was at the top of its game in the denim sector during the 1990s and 2000s, Alberini is hoping to orchestrate a return to this golden age for the label's iconic product. Among the top priorities of the brand's new CEO are product development and optimisation of distribution. Alberini believes that some product categories – denim in particular – are underdeveloped in certain markets. "Denim has always been at our core and has always been a dominant product category for Guess, one that brings the customer into the store.Today, our denim penetration is much lower than our historic levels and I believe that we can grow it back with a great product assortment, strong store presentation and effective marketing. Other product opportunities include Marciano, our men's business and accessories across channels and territories just to name a few," explained Alberini.
He then went on to highlight the particularities of jean making, describing it as "a complex category" where nothing should be left to chance. "We're talking about assortments, we're talking about fabrics, watches, fits, styling and – just being able to really be relevant on the fashion side as well. [...] Then the second big thing is about the presentation. I think that today, if you go to our stores, you don't feel that we are the kind of powerful denim brand that we used to be. And I think we have to change then, and we will. [...] We think that denim is one of those products that nobody would come and buy without trying it on. And that gives our sales team a big opportunity to engage with that customer for a longer period of time and to be able to cross-sell and up-sell into other categories, that complement denim purchases," continued Alberini.
Before returning to the LA-based company to take over as its CEO, Alberini led Restoration Hardware from 2010 to 2014, before becoming chairman and CEO of Lucky Brand.
He further commented on the changes he has observed in the retail industry over the course of these nine years. "Obviously, the whole impact of e-commerce into sales and how the customer is shopping today has been pretty fundamental and very challenging for many companies to adapt," he explained. "I think that product development has changed quite a bit in the industry, and I think that most companies have tried to get significantly faster in their development. When you are running and managing a brand like ours that operates in multiple channels, the challenge of speed is more significant [...] But that being said, I think that, Guess has made some good progress in this, and there are several timelines that can be used here, when we want to go faster with certain product categories. I feel that there is, when you ask about the future, I think there is a big opportunity here to digitalize the supply chain processes [...] I think there is a lot more to do and it involves technology and we're going to go after that."
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