Guess Having a Bad Financial Year: Annual Profits Drop and Gucci Gets $4.66 Million in Lawsuit

363 days ago - The Fashion Lawyer : 1 Reply

Guess is certainly not having a great financial year. I recently posted that Gucci was awarded $4.66m for Guess’ IPR infringement. New information obtained shows that Guess reached a 3 year low this week and was valued at 3.5 times earning before interest, taxes, depreciation and amortisation, which is the lowest of any retailer or clothing brand owner in the US and less than half the industry median.

The financial crisis and austerity measures in Europe have hit the brand very hard, causing a drop in sales in Europe. Once worth more than $5 billion, the company sank 41% in the past year as the European debt crisis caused a reduction in consumer demand. Previously, 38% of its sales came from Europe and Bloomberg is of the opinion that a further 15% drop will take place this year.

Asia is another story, as sales are growing, especially in China. It is anticipated that growth will continue in Asia and help the brand to get through the Euro crisis.

Despite the drop in sales and profits, the brand is said to be viable; having half-billion dollars in cash and almost no debt.

The $4.66 million awarded to Gucci however, will further affect the brand as it pays out this money.

From your legal fashionista,