Guess? Inc. Cuts Back, Closes Stores
Los Angeles-based Guess? Inc. announced plans to make job cutbacks and close some stores as the result of a weak retail environment.
The company said that sales during the third quarter fell 8.5 percent, to $157.8 million from $172.4 million over the same period last year, and that third-quarter net earnings of $3.4 million or 8 cents per share for the period ending Sept. 28 were “in line” with projections. Those numbers include a one-time gain this year of $2.6 million after taxes from a legal settlement and last year’s charge of $2.6 million after taxes.
“There is no question that the economic environment, particularly in retail, continues to be uncertain and that consumer confidence has been shaken by a series of developments, including job losses, budget deficits and stock market volatility,” Guess president Carlos Alberini said in a press statement.
The company, which operates more than 200 retail stores in the U.S., declined to give details on how many stores it plans to close or how many employees it will shed before year’s end.
Additionally, the company’s decision to shutter under-performing stores will result in a fourth-quarter after-tax charge of up to $7.7 million.
Earlier this month, the company announced that it had entered into an $85 million asset-based, secured-credit arrangement with Wachovia Securities, replacing a four-year agreement it had with JP Morgan Chase. —Claudia Figueroa
