What is the story about?
What's Happening?
Authentic Brands Group has announced the acquisition of a 51 percent stake in Guess, a move that positions the company as a major player in the fashion industry. The acquisition, valued at $1.4 billion, involves the purchase of Guess's intellectual property and product licensing agreements. The remaining 49 percent will be retained by Guess cofounders Maurice and Paul Marciano, Nicolai Marciano, and Guess CEO Carlos Alberini. This deal, priced at $16.75 per share, represents a 73 percent premium over a previous offer by WHP Global. Authentic Brands plans to expand Guess into new categories and territories, leveraging its established global retail network.
Why It's Important?
The acquisition of Guess by Authentic Brands Group is significant for the fashion industry, as it consolidates Authentic's position as a leading brand management company. With Guess's established market presence and global reach, Authentic Brands is poised to enhance its retail sales, which are expected to reach $38 billion annually. This move also highlights the competitive nature of brand acquisitions, as WHP Global was previously close to securing a deal with Guess. The acquisition could lead to increased innovation and expansion in the fashion sector, benefiting consumers and stakeholders alike.
What's Next?
The deal is expected to close in the fourth quarter of Guess's fiscal year, in January. Authentic Brands plans to expand Guess's business into new categories and territories, and reactivate its archives. The existing management team will continue to operate Guess, ensuring continuity in leadership and strategy. Stakeholders will be watching closely to see how Authentic Brands integrates Guess into its portfolio and leverages its global retail network for growth.
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