Guess? Inc. Tests Marciano Division
With high-profile celebrity Paris Hilton as a brand spokesmodel, the grand opening of Guess? Inc.’s new Marciano store at The Grove in Los Angeles should have been a glitzy red-carpet event.
Instead, the opening was marked by little fanfare. One deejay played upbeat music, and young women eagerly browsed through the new label’s collection of jackets, jeans, dresses and shoes. But there’s a good reason for the low-key partying; the Los Angeles–based company’s Marciano division, still in the testing phase, has yet to make its biggest splash.
The company opened four Marciano stores in late 2004 and is scheduled to open five more in 2005. The concept has the potential to grow into a 100-store chain, said Andy Graves, senior equity analyst with San Francisco–based Pacific Growth Equities, in a research note. Paul Marciano—creative director, co-chairman and co-chief executive officer—and Carlos Alberini, president and chief operating officer of Guess could not be reached for comment.
The Marciano label and stores are meant to dress up women in their 20s and 30s with upscale clothes for every occasion. The line is marked by luxurious cashmeres, silk chiffons, denim looks and accessories— such as handbags in metallic colors and those featuring images of Hilton.
Graves said the Marciano stores have started business at an opportune time because anything luxurious is fashionable at the moment. “Forty-dollar jeans are not selling,” Graves said in the note. “However, the $100-plus Guess? denim and the $128 and $138 Marciano jeans are selling well.” He said dressy camisole shirts and purses are among the other bestsellers at The Grove store.
Other Marciano stores are located in the Garden State Plaza in Paramus, N.J.; the Dallas Galleria in Dallas; and the La Plaza Mall in McAllen, Texas.
Guess was in the early stages of a turnaround during 2002, when the company reported a net loss of $11.3 million, according to Graves. In 2003, Guess made net earnings of $7.3 million. The company reported being disappointed with the 0.5 percent November 2004 same-store sales of its Guess stores and forecast December sales would be flat. Graves, however, said he believes that Marciano and Guess could have a good 2005 because of their brand equity.
“Guess has a brand that’s much more pervasively known by women shoppers. It’s been around for 20 years,” Graves said. ”They have brand equity not just in America and Europe but [in] Asia and Latin America. We think Guess can reinvent themselves as an aspirational fashion-forward brand.” —Andrew Asch
