One of the popular clothing company, Guess? Inc is planning to close about 100 stores around the world. It is said that the closures will be in North America and China over the next 18 months.
According to the Guess Chief Operating Officer Carlos Alberini, many of the retailer’s leases are set to expire soon. Eventually, it will give management a chance to renegotiate terms.
“The recent stock performance and expected demand under our new-normal model made very clear that our store portfolios around the world could be optimized to increase profitability,” said Alberini.
On Wednesday last week, Guess shares have fallen as much as 24% to $9.71 (RM41.44). By excluding the currency fluctuations, sales fell 50% in the company’s first-quarter that ended May 2. It was believed to be caused by the store that closed for a long time during the COVID-19 outbreak.
As stated by the Bangkok Post, Guess has reduced their expenses during the closes by furloughing all store workers and half its corporate workforce while laying off 150 employees at its Los Angeles headquarters.
The management also has cut a bit of salary by as much as 70%. The clothing retailer even suspended rent payments in April and currently in negotiations with landlords.
Guess Chief Financial Officer, Katie Anderson said that the company has made progress with multiple landlords and is optimistic about what can be done to cut rental costs.
Source: The Bangkok Post