Guess Inc. (NYSE: GES), the Los Angeles based fashion firm, popular for its beach-body models and tight jeans, is ready to replace Paul Marciano, co-founder. A new external chief executive will be taking his place in the company.
Herrero to take over in August
Forty-six years old Victor Herrero, will be stepping into the shoes of Marciano in August. He has spent several years developing and expanding operations in Asia and Europe for Inditex. Inditex is a huge Spanish apparel brand which owns the Stradivarius and Zara brands.
Firms like Guess, whose main business continues to be in denim, have been struggling with popularity of yoga-wear. It has eaten a major chunk of the jeans sales.
According to retail expert, Ron Freidman, hiring of Herrero is a smart move, given his overseas background and experience in trendy fashion. He added further that there needs to be somebody who comes in and shakes things up.
North America reported negative same-store selling in the last quarter. However, this was balanced out by strong wholesale exports to Europe and decent retail performance, said the company.
Almost 59 percent profits and 46 percent of total revenue for 31st January came from Asia and Europe.
The Guess network
470 stores in Canada and the U.S. and 361 in other parts of the world were directly operated by Guess till May. Besides this, another 836 stores are run by distributors and licensees outside of Canada and the United States.
In the United States, the company’s network extends to include factory outlets, accessories stores, ‘G by Guess’ stores as well as Marciano stores, which are meant for the older customers.
Herrero will be given an initial yearly salary amounting to $1.2 million, as per regulatory filings. Besides this, he will also receive a signing bonus of $2 million and various performance-oriented bonuses.
In a statement, Marciano said that he along with his elder brother, Maurice Marciano, co-founder of Guess, spent over a year discussing and working with board members to hunt for his successor. Guess signed the agreement finalizing Herrero on 7th July.
Paul will take over as the executive chairman, succeeding Maurice and will also continue to retain his position as the chief creative officer.
Paul has remained chief executive at Guess for over 15 years. He shared the designation with Maurice for seven years.