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Guess Signs Deal in Mexico

September 26, 2006|From Bloomberg News

Los Angeles apparel maker Guess Inc. on Monday said it had signed a joint venture agreement in Mexico and opened two stores since May to expand in that country.

The venture is with an affiliate of Grupo Axo, a Mexican company that develops brands such as Coach Inc. and Tommy Hilfiger Corp., and is majority-owned by Guess, the company said.

The partnership will oversee the manufacturing, wholesale distribution and retail sales of Guess items in Mexico.

"International is a very big part of our initiatives for growth," said Carlos Alberini, president and chief operating officer.

Guess said it planned to open free-standing shops and more than 50 boutiques inside Mexican department stores to replicate the success it had in Canada, which started out as a joint venture in 1994 and is now a wholly owned Guess unit. Canada accounts for 20% of Guess' business in North America, Alberini said.

Guess, which owns 326 stores in the United States and Canada, also owns its European operations after acquiring the licensees there in 2005, Alberini said.

Guess products were sold in Mexico for more than 20 years through a licensee agreement until 2004, when the company ended that agreement, Alberini said.

Shares of Guess rose 2 cents to $48.81.

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