Georges Marciano flew to New York in December Despite his limited English, he convinced Bloomingdale's to display on consignment 30 pairs of his European-style jeans in Bloomingdale's flagship New York store. Guess jeans sales took off spectacularly the following year when Paul Marciano arrived in California to direct the company's advertising campaign. Although he had no previous advertising experience, Paul Marciano devised a campaign that revolutionized the way jeans--and clothing--were sold.
Instead of adopting the typical studio design, Paul brought his brother's jeans, and the models wearing them, outdoors, using grainy black-and-white photography and provocative poses described by Forbes as "catering to teenage cravings for sex, power, attention and self-love Demand for their product soon overwhelmed the Marcianos. Under the deal, Jordache was also licensed to set up a new line of jeans, called Gasoline, to use parts of Guess designs in a lower-priced line.
The Guess-Jordache deal neglected, however, to provide for written assurances against copying each others' designs, a common garment industry practice called "knockoffs. This lack of written agreement would soon come to haunt the company. Jordache's fortunes, however, had already begun to slip, as the designer jean market fizzled and the Jordache name increasingly became known as a mass merchandise label.
The Marcianos, on the other hand, sought to establish the Guess name as exclusively high-end. Throughout the company's growth, distribution of Guess clothing was limited largely to upscale department stores and the Marciano's own growing chain of MGA for Maurice, Georges, and Armand retail stores. By the time of the Jordache deal, the Marcianos had already begun to expand their line beyond jeans. In they entered the menswear market through a licensing agreement with Jeff Hamilton, Inc.
However, Guess soon sought to terminate the Hamilton license agreement and bring the menswear line in-house, maintaining that Hamilton's Guess line was oriented too strongly toward the young men's market, and that Hamilton's "dumping" according to Maurice Marcian in the Daily News Report of Guess merchandise in Kmart and other discount stores was hurting the label's high-end image.
This led to a legal battle with Hamilton that slowed growth in menswear, which Guess brought in-house in The Marciano's largest legal battle, however, was with Jordache. The Marcianos sued the Nakash brothers and Jordache in , charging that company with unfair competition and claiming that the Nakash brothers were using their position on the Guess board of directors and their access to Guess designs in the Hong Kong plant to produce knockoffs of Guess clothing in their Jordache line.
The Marcianos' suit asked the court to undo the agreement that had given the Nakashes control of half of Guess. The battle for control of Guess continued for the next five years. Along the way, both sides leveled charges of corporate espionage and document shredding; the Nakashes weathered an investigation by the Internal Revenue Service into Marciano-alleged tax evasion and customs quota fraud, and the Marcianos faced allegations of improper dealings with the IRS. At one point, the Marcianos hired Israeli commandoes to patrol their offices; the Nakashes, for their part, hired security experts to sweep their offices for bugging devices.
As one attorney involved in the case told Forbes: "This is not just war, this is total war. Take no prisoners. There is not an issue that has not been filed. This is litigation at its worst. While much of its sales continued to be in jeans, Guess had successfully entered the women's market, with its upscale Georges Marciano label, as well as children's, leatherwear, and footwear. Relaunching its menswear line in , Guess began to make inroads in that market as well, placing its products in men's departments of most major department stores.
Meanwhile, Guess' chain of retail stores, renamed Guess and averaging 2, square feet, grew to 19 locations. The company also moved its Los Angeles operations to a acre site encompassing six buildings, where it manufactured 93 percent of its products.
The legal battle between the Marcianos and the Nakashes finally ended in early , when a jury agreed with the Marcianos and returned percent control of Guess to them.
A second trial was set for May to determine damages. However, as the jury in that case was deliberating, the Marcianos announced that they had reached a settlement with the Nakashes for an undisclosed amount. This development occurred over the objections of their attorney, who pushed them to continue the case to full victory.
The Marcianos stated, however, that they feared seeing the case continue through the appeals process and still more years of litigation. But with the battle with Jordache over, the Marcianos set about expanding their business. The company also expanded its retail chain, to 33 stores by the end of , including its European flagship store in Florence, Italy.
While the recession of the early s slowed growth somewhat, to 7 percent in compared to double-digits throughout the s, Guess menswear took off, with a 41 percent sales growth in alone. By the end of that year, menswear accounted for just under 40 percent of company sales. International sales were also becoming more important to overall revenues.
Licensing arrangements brought Guess clothing to more than a dozen countries, with sales particularly strong in Canada and Japan. In that year, Georges Marciano stepped down as the company's chairman, chief executive officer, and designer, citing differences of opinion with his brothers over the direction of the company. In some cases, no conclusion could be reached because the individuals either declined to be interviewed or provided insufficient information to the investigators," Tuesday's filing said.
Four brothers, including original designer George Marciano, in founded the brand whose denim became a phenomenon in the s and s. Paul Marciano handled the company's advertising, best known for its black-and-white photos of models including Anna Nicole Smith. Resignations like his in the fashion industry have been far rarer than in movies and other media in the wave of sexual misconduct revelations spurred by stories on Harvey Weinstein in October.
Attorney Lisa Bloom, who represents four of those women, said in a statement that they are pleased with his stepping down as board chair but disappointed he'll stay on in other capacities.
Top Stories. They grew up poor, sons of an Orthodox rabbi, in Marseille. When they were young, they opened a series of stores in France. Guess began in , with Georges and Maurice first, then Armand and Paul. Georges designed the clothes, burnishing Guess' signature style: stonewashed denim, lighter in color, softer and more form-fitting than competitors'.
Maurice handled product development. Armand ran distribution. Paul created the advertising, all of it in-house. Sex sold Guess jeans. Paul developed ads indelibly linking the brand with steamy images of women wearing practically nothing but Guess jeans.
He opted for unknown models, demonstrating an eye for picking a face that would connect with his customers while launching the careers of many famous models: Claudia Schiffer, Naomi Campbell, Laetitia Casta and Smith, who became infamous for marrying octogenarian billionaire J. Howard Marshall before dying tragically in Guess' first big hit was the Marilyn jean, pants with such a snug fit it had three zippers: one at the fly, one at each ankle.
Their expansion plans quickly exceeded their bank account. The two denim phenoms apparently had a gentlemen's agreement that Jordache would not knock off Guess, but shortly after the deal was done, the Marcianos alleged that their new partners copied Guess' designs. It eventually led to a courtroom brawl that produced at least 70 hearings, depositions and , legal documents. The Nakash brothers, in turn, accused the Marcianos of operating a kickback scheme and paying themselves double the salary outlined in the employee contracts.
According to previous FORBES reporting, things got even murkier when the Marcianos established a cozy relationship with an IRS agent, feeding him allegations about the Nakashes' tax dealings--a congressional panel later accused some high-ranking IRS officials of misconduct; the Marcianos reportedly denied any wrongdoing. The two sets of brothers settled in , and while the terms were never disclosed, the Marcianos emerged from the melee the sole owners of Guess, which thrived amid the ordeal.
At that point the Marcianos began to turn on one another. Georges wanted to put Guess into lower-tier stores, like J. His brothers hated the idea. Different camps formed within the company, with each pledging allegiance to either Georges or the other three. To raise money, the brothers decided to take Guess public and bunkered in. It was a challenging place to work, difficult at times.
Guess started axing any wholesalers that might tarnish that image, though it continued to sell in outlets like Bloomingdale's and Dillard's. Things did not ease up after the offering. One former Guess executive recalls a particularly fraught meeting occurring about the logo on a pair of jeans.
A distraught Maurice demanded, at the top of his lungs, that the logos get replaced immediately. The theater moved out of the offices, as Guess continued to shift away from wholesale to its own branded stores, including in Europe. Emboldened, the Marcianos rolled out a handful of new store formats all around the world.
One devoted itself to accessories. G by Guess, meanwhile, positioned itself as the middle ground between factory and regular prices. Yet a third chain received a particular burden: the Marciano name. Those Marciano stores--half the size of the older Guess stores, with a more boutique feel--carried higher-priced women's clothes.
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