Early Monday saw a 27% increase in Guess Inc.’s stock after the apparel, accessory, and footwear manufacturer announced that New York-based investment firm WHP Global had made an offer to buy it out for $13 per share in cash.
The price is 34% more than the closing price of the stock (GES) on Friday, which was $9.70.
A mix of equity and third-party debt funding would be used to finance the offer, in addition to rollovers from some current shareholders, including CEO Carlos Alberini and co-founders Paul and Maurice Marciano.
A special committee of independent directors has been established by Guess to evaluate the offer with the help of external financial advisors.
The offer was made approximately a year after Guess decided to buy the fashion brand Rag & Bone, which was situated in New York. This was the company’s first purchase in its 43-year history.
The agreement stated that Guess would own all of the brand’s operational assets and form a 50/50 joint venture with WHP to share its intellectual property.
Among the fashion brands in WHP’s portfolio are Anne Klein, Vera Wang, and Isaac Mizrahi. Guess stated that until the committee has finished its assessment, its board will not provide any other comments.
The announcement comes at a time when luxury goods companies are having trouble, as a decline in China, a crucial market until the epidemic years, and inflation are reducing demand for their expensive goods.
Versace and Kering’s (FR:KER) Gucci are among the many fashion businesses that are selling off assets or replacing their creative directors.
After almost thirty years in the position, which she assumed following the 1997 murder of her brother Gianni Versace, Donatella Versace revealed last week that she would be leaving her position as CEO of her family’s fashion business.
With effect from April 1, she is anticipated to be replaced as chief creative officer of Versace by Dario Vitale, the former director of design and image at Miu Miu.
According to sources, Versace will soon be acquired by Prada SpA (HK:1913) from Michael Kors’ parent company, Capri Holdings Ltd. (CPRI).
Gucci’s chief creative director is Demna Gvasalia, who was previously the creative director of Balenciaga.
Over the years, Guess has experienced its share of problems, such as the drama surrounding accusations of sexual misconduct against co-founder Paul Marciano in 2018. As a consequence, the corporation said that he would relinquish his daily responsibilities.
