Done Deal: Guess completes acquisition of Rag & Bone
Guess Inc. has closed on the first acquisition in its history.
The retailer and global brand management firm WHP Global have completed their acquisition of fashion brand Rag & Bone. Under the terms of the deal, Guess owns all of the operating assets of the brand, while Guess and WHP jointly own the brand’s intellectual property.
The full purchase price of the acquisition was not disclosed, but Guess said it contributed $57.1 million towards the deal, in addition to contributions from WHP Global.
Rag & Bone will continue to be based in New York City. As part of the Guess portfolio, the company's team will operate as an independent fashion brand.
Rag & Bone directly operates 34 stores in the U.S. and two stores in the U.K. Its merchandise, which includes both men's and women's fashions, is also available in high-end boutiques, department stores and through e-commerce globally. In 2023, the brand generated revenue of approximately $250 million.
In connection with the closing of the acquisition, Guess has entered into an agreement with the lenders of its existing $150 million asset-based revolving credit facility to increase the borrowing capacity under the facility by $50 million to a total of $200 million.
In March, Guess reported that its fourth-quarter net income rose 20% to $115.3 million, with adjusted earnings per share of $2.01 way ahead of analysts estimates of $1.56 per share. Revenues rose 9% to $891.1 million, also more than expected. Total net revenue for fiscal 2024 increased 3% to $2.78 billion.
“We believe we are at an inflection point, and we expect to exceed $3 billion in revenues for the first time in our Company’s history with a solid growth plan for our core business, the integration of rag & bone into our portfolio and the launch of Guess Jeans to capture the demand from Generation Z consumer,” said Guess CEO Carlos Alberini in the company’s earnings release.
As of Feb. 3, 2024, Guess directly operated 1,002 retail stores in Europe, the Americas and Asia. The company’s partners operated 551 additional retail stores worldwide. Also, Guess and its partners and distributors operated in approximately 100 countries worldwide.