Challenges faced by Guess and How Guess solve its problems
In 1996, Guess continued with its earlier expansion plans. However, the next year was a disappointment to Guess due to weak performance in its retail stores, weaknesses in its wholesale division, slower-than-expected non-core Asian licensing revenues, and discontinued licenses. Solution.
Although Guess was disappointed with their performance, still three areas were stronger which is it international operations, mostly in Latin America and Europe; certain core licensed product lines, such as handbags and accessories; and women's knitwear.
The company lost market share in 1998, mostly due to competitive pressures in the branded basic jeans business and a terrible retail environment Solution
To solve the problem, early 1999, Guess started and create its first virtual retail (e-commerce) store at its web site, http://www. Guess.com. The web site, since its inception, had consistent interactive success in combining fashion images, information, and technology.
In 2000, Guess introduced G Brand, a complete line of high-quality women's and men's jeanswear that used premium quality Italian ring spun denim in its European designs. But, the company's profitability declined greatly because of higher retail occupancy costs due to less productive stores along with additional expenses for new stores; large inventories due to excessive buying and slowing sales trends; increased consulting fees; and higher advertising expenses.
In response to its problems, Guess began to implement a strategy to improve its profitability and maximize shareholder returns by reinvigorating its past successes at attracting fashionable and trendy men and women. To coordinate new strategy, Guess included using creative new merchandising techniques, retail expansion plans, and strong marketing methods. With increased competitors, Guess decided to emphasize what other companies could not offer customers...
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