The luxury market has struggled over the last few years, facing one of its worst slumps since the Great Recession.
This down spiral is partly due to an unpredictable global economy and ever-evolving consumer habits, which are causing a softening in customer spending.
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Because of this concerning pattern, many fashion companies have had to develop turnaround strategies to cut costs. Some have even had to shed their less profitable counterparts, and others have had to be acquired by bigger companies or accept the fact that closures may be in their near future.
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However, some luxury companies have managed to stay afloat, with a few fortunate ones getting off scot-free and defying this trend altogether.
People walking in front of Guess store.
Guess stays afloat despite the luxury slump but continues to face slowdowns
Guess’ (GES) business has been doing relatively well the last few months compared to most of its rivals despite the current luxury slump. In its latest earnings, Guess delivered mostly positive numbers across all its markets but still hit quite a few bumps that signal some potential red flags.
According to Guess’ third-quarter earnings report for fiscal 2025, total revenues increased by 13% compared to the year prior, with America’s retail up 12% and America’s wholesale up 79%.
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Although the business was profitable, revenue growth was slightly lower than expected, and America’s comparable retail sales decreased 14%, failing to meet expectations.
Guess’ stock has also been rocky, with shares down nearly 13% year to date. However, a sudden revelation has led its tumbling stock to skyrocket over the last few days.
Guess receives an offer to go private and its shares soar
On Mar. 17, Guess announced it had received a non-binding proposal to go private from WHP Global. The brand management and acquisitions firm is offering to purchase Guess’ outstanding shares for $13 per share, excluding those currently owned by the company’s co-founders and CEO, which make up around 43% of the company’s total stock.
According to the offer, the transaction would be financed through a mix of equity, third-party debt financing, and reinvestments by rollover shareholders.
Guess has formed a special committee to analyze and further evaluate the proposal, which makes the potential for the fashion company to go private even more promising.
Nonetheless, Guess stated there is no guarantee that this deal will come to fruition and doesn’t plan to disclose any more details or make further comments until a full evaluation is completed.
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On the day the offer was unveiled, Guess’ shares soared 31% and stood at $12.27 per share as of Mar. 19 at market close, with a nearly $631.4 million valuation.
However, despite the huge spike, WHP Global’s offer is still higher. It values the company at $751.5 million, representing a premium of over 19%.
WHP Global is no stranger to Guess. In April of last year, both companies joined forces to acquire the New York-based fashion brand rag & bone
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