Guess to accumulate Rag & Bone

Guess Inc. agreed to accumulate Rag & Bone, the retailers announced on Feb. 16. The acquisition is in partnership with brand management firm WHP Global.

“We’re excited so as to add an iconic brand comparable to Rag & Bone to Guess, further diversifying our portfolio with complementary customer bases and price points. We look ahead to partnering with WHP Global to construct on Rag & Bone’s heritage,” Guess CEO Carlos Alberini said. “Guess has an incredible platform with a robust global distribution network and outstanding licensee partners that may enable us to power the expansion and expansion of the Rag & Bone business.”

Guess is No. 178 within the Top 1000, Digital Commerce 360’s rating of North America’s leading retailers by online sales. Rag & Bone ranks No. 652.

Terms of the deal

Guess will buy all of Rag & Bone’s operating assets, the retailer said. Guess and WHP Global may even each own half of Rag & Bone’s mental property, in keeping with a public statement. They are going to create a licensing agreement that offers Guess exclusive rights to fabricate and sell licensed products in exchange for royalties.

The retailers didn’t share all financial terms of the deal. Nevertheless, Guess’ commitment within the agreement totals $56.5 million, with the potential for an extra $12.8 million depending on Rag & Bone’s 2024 results.

The deal is anticipated to shut throughout the first quarter of Guess’s 2025 fiscal yr.

Rag & Bone’s history

Rag & Bone was founded in Recent York City in 2002. As of February 2024, the retailer operates 34 stores within the U.S., and one other two within the U.K. Its products are also sold through other retailers, including Nordstrom (No. 21 within the Top 1000), Saks Fifth Avenue (No. 28) and Neiman Marcus (No. 72).

In 2023, Rag & Bone generated $250 million in revenue, it said. The apparel company is privately held.

Following the acquisition, Rag & Bone will proceed to be headquartered in Recent York City. It is going to operate as an independent fashion brand under the Guess umbrella, the retailer said.

“I’m thrilled about this latest relationship with Guess and WHP Global. Today marks the start of an exciting latest chapter as Rag & Bone joins forces with a much larger international fashion company,” Rag & Bone chairman Andrew Rosen said in a written statement. “It’s an awesome opportunity for our team to take the brand to the following level, mixing our unique styles and respective expertise to create latest possibilities for Rag & Bone on a world scale.”

Why the acquisition is important for Guess

Guess will make its first-ever acquisition in its 43-year history with Rag & Bone, co-founder and chief creative officer Paul Marciano said.

In its most up-to-date financial report, Guess said revenue grew 3% to 651.2 million in its Q3 ended Oct. 28. Guess CEO Alberini said the addition of Rag & Bone will improve the retailer’s financial position further.

“We expect the transaction to deliver earnings per share accretion in the primary yr and powerful value creation for our shareholders for years to come back,” he stated.