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Guess shuffles siblings' titles

Paul Marciano now is sole CEO and Maurice is sole chairman, after having shared the roles.

January 09, 2007|Leslie Earnest | Times Staff Writer

Trendy apparel seller Guess Inc., where siblings Maurice and Paul Marciano have shared the role of chief executive for more than seven years, said Monday that younger brother Paul had claimed that title as his own.

Maurice, meanwhile, has become the Los Angeles-based retailer's sole chairman, another title the brothers had been splitting since 1999. Paul now is vice chairman.

Analysts said they didn't expect the shift to make much difference for Guess, even though Maurice would be less involved in the company's day-to-day operations.

"The Marcianos have always been the guiding light there," said Eric Beder, a retail analyst at Brean Murray, Carret & Co., "and that's not going to change."

Paul Marciano, 54, said in a phone interview that his goal would be to surround himself with people who have "great talent and a good attitude," while his brother, 58, would be freed from some daily chores to sharpen his focus on strategy.

"This is where Maurice will play a much bigger role in where the company goes," he said, "and Maurice is excellent at that."

The chief executive shrugged off the changing titles.

"Besides working Monday through Friday, we are together on weekends as well," Paul Marciano said, as he prepared to catch a flight to Italy on Monday night with his brother. "So title has never really been a subject for us."

Initially, there were four brothers working together. Georges Marciano left in 1993, reportedly over a disagreement in strategy, and Armand Marciano resigned a few years ago.

When the company went public in 1996, Maurice became chairman and chief executive, while Paul served as president.

Analysts seemed more interested in another announcement that Guess made Monday -- that the company had bought a 75% interest in licensee Focus Europe for $22.6 million, a cash-and-stock deal that included the leases of four Guess by Marciano stores in Italy.

Bologna, Italy-based Focus has for the last decade manufactured and distributed the Guess by Marciano line for women and men in Europe, Asia and the Middle East. Focus generated sales of about $65 million in the last 12 months, said Guess, which has the option to buy the remaining 25% of the company by 2011.

Analysts likened the acquisition to the apparel seller's purchase two years ago of its European jeanswear licensee, which the company said had become "a phenomenal growth vehicle" for Guess in Europe.

"The acquisition shows the company is very serious about controlling their destiny in Europe," Beder said.

Investors appeared to be satisfied. The company's shares rose $1.45 on Monday to $67.28, up 2.2%.

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