Guess CEO Unexpectedly Steps Down

After four years as the chief executive of Guess?, Inc., it was announced that Victor Herrero would be stepping down from the Los Angeles lifestyle-clothing brand on Feb. 2.

Taking over the top position will be Carlos Alberini, who left the company in 2010 to work for Restoration Hardware and Lucky Brand Inc., where he most recently was the chairman and chief executive.

Calls to Guess to comment on the executive changes were not immediately returned. But Maurice Marciano, the co-founder of the company, said in a statement that he was “excited to have Carlos coming back as CEO. He was instrumental in building the international business in Europe and Asia during his 10-year tenure with the company.”

On Jan. 25, Guess and Alberini agreed that he would take over the top executive position upon his separation from Lucky Brand, which Lucky Brand said was on Jan. 28.

On Jan. 28, Guess issued a succinct press release announcing the executive change. While Guess is waiting for Alberini to join the company, Maurice Marciano will step in as acting CEO.

It was also announced that Paul Marciano, Maurice’s brother and another co-founder of the brand, would stay on with the company as chief creative officer. He resigned as chairman last year amid a sexual-harassment probe and was to leave his chief-creative-officer position in January. But the company said his employment now will be “at will.”

Guess, in filings with the Securities and Exchange Commission, said Herrero would receive a $2.4 million separation agreement, which is equivalent to two years’ worth of his monthly $100,000 salary plus his bonus for fiscal 2019. He will also have his life-insurance and health-insurance costs covered for a two-year period and receive full vesting of his equity awards.

Once Alberini steps in, his annual base salary will be $1.2 million, and he will receive a $1 million signing bonus. Alberini was president and chief operating officer at Guess from 2000 to 2010.

Herrero, who had worked for a decade at Spanish company Inditex, parent company of Zara, came on board in 2015 to turn things around at Guess. He launched an aggressive campaign to hire influencers and celebrities such as Jennifer Lopez to publicize the product. He also started shuttering U.S. stores as sales in Europe and Asia grew and U.S. sales languished.

During fiscal 2015, Guess’s earnings were $867.9 million on net revenues of $2.4 billion. During fiscal 2018, that had not improved. Earnings during 2018 were $828.8 million on $2.36 billion in net revenues.

Particularly painful was the third quarter of fiscal 2019, when the company experienced a $13.4 million loss on $605.4 million in revenues. During the same period in 2018, net loss was $2.9 million on $548.9 million in net revenues.