What Led To Guess’ Revenue And EBITDA Decline Over The Last Five Years?

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Specialty apparel retailer Guess has been delivering a lackluster performance over the past few years on account of several macro-economic and product-related issues. In Europe, persistent weakness in demand and consumption has troubled a number of companies, including Guess, and an economic slowdown in China and South Korea has severely impacted its growth in Asia. In North America, the poor performance of the accessories business, Guess’s pricing strategies, and an industry-wide decline in foot traffic, have all pummeled the retailer’s growth. Apart from these issues, the strengthening dollar has also played against the company. With an aim to turnover its performance in Q2 FY2016 (fiscal year ends in January), Guess’ management appointed Victor Herrero — the executive responsible for building a $4 billion business for Inditex in Asia — as its Chief Executive Officer.  Though the company’s lukewarm performance continued over into 2015, it is important to note that Guess has started taking steps towards improving its performance with a special focus on Asia as a major driver for growth.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Guess

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