Guess?, Inc. (NYSE: GES) and global brand management firm WHP Global today announced a definitive agreement to acquire New York-based fashion brand Rag & Bone. Under the terms of the agreement, guess what? will acquire all operating assets of rag & bone, with Guess? and WHP Global will jointly own the Rag & Bone intellectual property.
Since its origins in New York in 2002, rag & bone has established itself as a leader in the American fashion landscape. Known for its authentic style, combining traditional craftsmanship with modern cultural references, the brand has over the years become synonymous with quality, simple clothing for men and women, with an innovative yet understated New York aesthetic and solid experience. in denim.
The brand currently directly operates 34 stores in the US and two stores in the UK, and is also available in high-end boutiques, department stores and through e-commerce globally. In 2023, rag & bone generated unaudited annual revenue of approximately $250 million and adjusted EBITDA of $18 million.
Carlos Alberini, can you guess? Executive Director, said: “We are excited to add an iconic brand like rag & bone to Guess?, further diversifying our portfolio with complementary customer bases and pricing. We look forward to partnering with WHP Global to build on Rag & Bone's legacy. Guess? has an incredible platform with a strong global distribution network and outstanding licensing partners that will enable us to drive growth and expansion of the rags and bones business. “We expect the transaction to generate accretive earnings per share in the first year and strong value creation for our shareholders in the years to come.”
Pablo Marciano, guess? co-founder and creative director, said: “rag & bone is a brand that I have always loved and respected. It is a brand well known for its preeminence in American fashion that over the years has remained true to its roots and founding values, with an unwavering commitment to quality and authenticity. This acquisition is the first in Guess?'s 43-year history, and I am delighted to welcome Rag & Bone to our family. “I look forward to working with Andrew Rosen and the talented team at Rag & Bone to continue the brand’s product and market expansion internationally.”
Yehuda Shmidman, Global President and CEO of WHP, said: “The acquisition of rag & bone aligns us with powerful partners and grows WHP Global's portfolio to more than $7.5 billion in retail sales across 11 brands. “We have great respect for Rag & Bone’s business and brand positioning, and we look forward to building on its success as we capture the attractive opportunities ahead.”
Andrew Rosen, Chairman of the Board of Directors of Rag & Bone, said: “I am excited about this new relationship with Guess? and WHP Global. Today marks the beginning of an exciting new chapter as rag & bone joins forces with a much larger international fashion company. “It is a great opportunity for our team to take the brand to the next level, combining our unique styles and respective expertise to create new possibilities for rag & bone on a global scale.”
Rag & Bone will continue to be based in New York City. As part of Guess? portfolio, the Rag & Bone team will operate as an independent fashion brand focused on continuing to provide unique and timeless collections to its customers.
Transaction Highlights:
Create a strong partnership with WHP Global, one of the world's leading brand management companies today. This transaction will allow Rag & Bone to maximize its global expansion by benefiting from Guess?' and WHP Global's distribution platforms and partners and licensees around the world.
Do you take advantage of Guess?' Powerful infrastructure to accelerate rags and bones growth and drive synergies. Over the years, guess what? has developed a strong global infrastructure and network of licensees and wholesale partners. Through this transaction, Rag & Bone will benefit from Guess?' ability to support the growth of its product offering, expand brand reach to new markets and drive operational efficiencies.
It expands. Guess?' Global portfolio of lifestyle brands with a commitment to timeless, innovative designs that customers love. Rag & Bone Acquisition Underlines Guess?' long-term growth strategy to drive a larger business, while maintaining a focus on delivering the best products for customers. This transaction brings together highly complementary pricing and customer bases along with creative teams dedicated to maintaining a reputation for innovative design and uncompromising quality.
Positions Guess? to drive greater value for shareholders. This transaction is consistent with the Company's commitment to generating strong value for its shareholders through an efficient and opportunistic approach to capital allocation. The potential in terms of revenue growth and operational efficiency of Rag & Bone is expected to make the transaction accretive to Guess?'s earnings per share? in the first year.
Details of the transaction
Guess? and WHP Global have signed a definitive agreement to acquire Rag & Bone, under which Guess? will contribute 56.5 million dollars. Additionally, there is the potential for incremental earnings consideration from What Guess? will be responsible for up to $12.8 million, based on pre-set levels of sales and EBITDA performance over the course of Rag & Bone's 2024 fiscal year.
Under the terms of the agreement, guess what? will acquire and own all of the brand's operating assets and assume the related operating liabilities of the rag & bone business. Also, a joint venture 50% owned by Guess? and 50% by WHP Global will acquire the intellectual property of rag & bone. Guess? and the joint venture will enter into a licensing agreement that will grant Guess? the exclusive right to use Rag & Bone's intellectual property to manufacture licensed products worldwide and sell licensed products in specific territories in exchange for Guess? payment of a royalty rate.
The acquisition is subject to customary closing conditions, including regulatory approval, and is expected to close during Guess?'s first quarter. Fiscal year 2025.
Advisors
The Sage Group, LLC is acting as financial advisor and O'Melveny & Myers LLP is acting as legal advisor to Guess?, Inc. Kirkland & Ellis LLP is acting as legal advisor to WHP Global. Solomon Partners, LP is acting as financial advisor and Golenbock Eiseman Assor Bell & Peskoe LLP and Katten Muchin Rosenman LLP are acting as legal advisors to Rag & Bone.
Note: The content of this press release has not been edited by Fibre2Fashion staff.
Guess and WHP Global have agreed to acquire fashion brand Rag & Bone. Guess will own the operating assets, and both Guess and WHP Global will jointly own the intellectual property. Rag & Bone generated approximately $250 million in revenue in 2023. The deal aims to diversify Guess' portfolio and leverage its global infrastructure to accelerate Rag & Bone's growth.
Fiber2Fashion News Desk (HU)
