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For Guess, Covid Has Been a Catalyst for Smarter Business Decisions

Guess Inc. CEO Carlos Alberini is confident in the company’s vision, despite the pandemic making it more challenging than ever to make future projections. On Monday at the 24th Annual ICR XChange Conference, an event that brings together public and private company management teams to share consumer trends and public company prospects, Alberini focused on the changes being made throughout the company’s Guess and Marciano brands that are fueling optimism.

What’s caused some brands to sink and others to swim in the face of a global crisis was the ability to be nimble. Despite its size, Guess acted quickly to challenges, re-engineering its store fleet by closing 170 underperforming stores and renegotiating 400 leases. At the same time, it opened 55 retail locations, many of which were popups that serve as a tool for new customer acquisition. By opening stores in multiple markets and striking deals with what Alberini refers to as “beneficial terms” that don’t require a significant long-term commitment, Guess has been able to test new locations and identify which ones will best serve the company moving forward.

The pandemic also created new opportunities surrounding a more localized supply chain, as inflated costs and global shipping challenges presented obstacles for brands throughout the industry. Alberini’s mission to make strategic updates to the company’s supply chain echoes the sentiments shared in the company’s Q3 earnings call, in which he announced it moved 10 percent of apparel sourcing to locations that are closer to distribution. The company is also consolidating its vendor list from over 500 to 135, and ordering products in advance to allow for extended lead time. Shipping methods are also getting an update, with the company exploring alternatives such as trains and, in some cases where it makes sense, planes, to move products faster between China and Europe.

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The need for better data capture has been accelerated by the pandemic, and Guess is no exception. Alberini stated that the company had a “head start,” as it began its implementation of Salesforce before the pandemic, and has doubled down on its customer relationship management strategies ever since.

In Europe, the company implemented Customer 360—a Salesforce-powered tool for better data collection, customer segmentation, personalized marketing and consumer insights—and is currently rolling it out in North America. “Customer 360 has helped us be a lot more consistent with everything from the colors that we pick for the season, to all of our marketing,” he said. “[Implementing it in North America] will be a huge gamechanger for us.”

He added that the enhanced focus on data will also help with demand forecasting and inventory management, noting that the new tools will help make sure that the company is “completely aligned with vendors from the second that a line is developed so we can accelerate development of certain styles accordingly.”

The company will continue its premiumization strategy, in which it prices items based on perceived customer value and minimizes discounting. According to CFO Katie Anderson, the approach will be a permanent shift in the way the company has always done business.

“We’re increasing the quality of products in multiple areas including packaging, we are changing the fabrications that we are using—you’re not going to find anything in our assortment that that has polyester now—and that was not the case in the past,” she said. “We are doing a lot to just give the quality of materials that are completely aligned with the price that we are setting for the product.”

Retailers are taking note. “Wholesalers have doubled down on the brands they think have a significant future, and we are clearly one of them,” Alberini said. “We gained market share during the crisis, and we believe that we are poised to continue to gain a lot more.”