Guess Inc. on Monday said it entered into a 250 million euros ($264 million) revolving credit facility through its wholly owned Swiss subsidiary, Guess Europe Sagl.
The company said the facility has an initial term of five years, with an option to extend the maturity date by up to two years and an option to expand the facility by up to 100 million euros ($106 million), subject to certain conditions. The new facility replaced certain short-term borrowing arrangements with various banks totaling 120 million euros ($127 million).
The Guess Sustainability Plan focuses on three key pillars–“operating with integrity, empowering our people and protecting the environment.” In line with the third pillar, the interest rate for the new facility will be subject to an annual adjustment based on the achievement of specific sustainability goals aimed at reducing greenhouse gas emissions, increasing the use of sustainably sourced materials and increasing the penetration of Guess Eco products.
Guess CEO Carlos Alberini said the European credit facility reflects the importance of the European region to the company since it is the largest segment, as well lenders’ confidence in its strategy.
“We remain highly committed to our goal of protecting the environment and see sustainability as fully integrated into our operations,” Alberini said. “This new credit facility will not only provide incremental access to longer term capital, but will also align financial incentives with our sustainability goals. In our company, we continue to make every decision and take every action with the long-term in mind.”
Several companies have secured sustainability-linked loans and credit facilities of late. Last month, Mango strengthened its commitment to sustainability after refinancing its debt and, for the first time in the company’s history, linking it to environment, social and good corporate governance (ESG) criteria. The agreement involves achieving 100 percent use of sustainable cotton, recycled polyester and cellulose fibers of controlled origin, as well as reducing CO2 emissions by more than 10 percent, all by 2025.
In March, Gildan Activewear signed an amended and restated credit agreement to its existing $1 billion revolving credit facility to incorporate sustainability-linked terms, underscoring the company’s commitment toward its ESG targets.
Prada made headlines in late 2019 when it signed a loan tied to meeting certain sustainability goals with Crédit Agricole Group as its financial partner.
For the year ended Jan. 29, Guess saw net revenue rise 38.1 percent to $2.59 billion. Net earnings were $171.4 million compared to a net loss of $81.2 million for the prior year.