Guess Adds New Lines, Profits

Paul Marciano, co-chairman and co-CEO, said the company is rolling out slowly with its two new store concepts, Marciano and Guess accessory stores, saying Guess expects to open about 10 to 12 of each of the new store concepts in the next eight to 10 months. The Guess CEO noted that at La Plaza Mall in McAllen, TX, where a new Marciano store has opened separately in a mall that already has an existing Guess store, the Marciano store is "performing above plan" and the Guess store has not lost business. "It is a little early to talk about that, but we are very happy about it and I hope we are going to see that as a pattern," the Guess CEO said.

The roll-out of the Marciano and accessory lines is a continuation of a strategy described in its previous third-quarter SEC filing, in which Guess said it would open Marciano and Guess accessory stores in the second half of this year. The Marciano locations are a re-branding of the Guess Collection line at higher price points that target "a more upscale contemporary customer," the company said. Besides being marketed in separate Marciano stores, the Marciano line will also be available in the majority of Guess retail stores, where it will occupy up to 20% of the floor space, CEO Marciano said at the recent conference call. Previously announced plans for the accessory stores included three retail versions and three factory outlet versions of the new concept.

Guess reported total net revenue of $197.8 million for the third quarter, up from $166.7 million in the third quarter of 2003. Marciano attributed the strong quarterly sales and earnings to improved results across all segments of the company's business: retail, wholesale and licensing. Comparable store sales increased 10.9% during the third quarter.