Guess?, WHP Global to Acquire rag & bone

Apparel label, Guess?, and global brand management firm, WHP Global, have announced an agreement to acquire New York-based fashion brand, rag & bone.  

Under the terms of the agreement, Guess? will acquire all rag & bone operating assets, with Guess? and WHP Global to jointly own rag & bone’s intellectual property. Guess? will also will contribute $56.5 million and there is the potential for an incremental earnout consideration of which Guess? will be responsible for a maximum of $12.8 million, based on preset levels of sales and EBITDA (earnings before interest, taxes, depreciation and amortization) performance over the course of rag & bone’s 2024 fiscal year. 

Guess? will acquire and own all of the brand’s operating assets and assume the related operating liabilities of the rag & bone business. In addition, a joint venture owned 50% by Guess? and 50% by WHP Global will acquire rag & bone’s intellectual property. Guess? and the joint venture will enter into a license agreement granting Guess? the exclusive right to use rag & bone IP to manufacture licensed products worldwide and to sell licensed products in specified territories in exchange for Guess?’s payment of a royalty fee. 

Since its origins in New York City in 2002, rag & bone has established itself by blending traditional craftmanship with modern cultural references in its apparel for men and women, with a strong expertise in denim. Currently, the brand directly operates 34 stores in the U.S. and two stores in the U.K., and is also available in boutiques, department stores and through e-commerce globally. In 2023, rag & bone-generated, unaudited annual revenue of approximately $250 million and adjusted EBITDA of $18 million. 

Related:WHP Global Announces International Expansion Plans for Express

 “We are excited to add an iconic brand such as rag & bone to Guess?, further diversifying our portfolio with complementary customer bases and price points,” says Carlos Alberini, chief executive officer, Guess?. “We look forward to partnering with WHP Global to build on rag & bone’s heritage. Guess? has an incredible platform with a strong global distribution network and outstanding licensee partners that will enable us to power the growth and expansion of the rag & bone business. We expect the transaction to deliver earnings per share accretion in the first year and strong value creation for our shareholders for years to come.” 

“rag & bone is a brand I have always loved and respected,” says Paul Marciano, co-founder, chief creative officer, Guess?. “It is a brand well known for its preeminence in American fashion that over the years has stayed true to its roots and founding values, with an unwavering commitment to quality and authenticity. This acquisition is the first one in the 43-year history of Guess?, and I am thrilled to welcome rag & bone to our family. I look forward to working with Andrew Rosen and the talented team at rag & bone to pursue the brand’s product and market expansion internationally.” 

“The acquisition of rag & bone aligns us with powerful partners and grows WHP Global’s portfolio to over $7.5 billion in retail sales across 11 brands,” says Yehuda Shmidman, global chairman, chief executive officer, WHP Global. “We have great respect for rag & bone’s business and brand positioning and look forward to building on its success as we capture the compelling opportunities ahead.” 

“I am thrilled about this new relationship with Guess? and WHP Global,” says Andrew Rosen, chairman of the board, rag & bone. “Today marks the beginning of an exciting new chapter as rag & bone joins forces with a much larger international fashion company. It’s a great opportunity for our team to take the brand to the next level, blending our unique styles and respective expertise to create new possibilities for rag & bone on a global scale.” 

rag & bone will continue to be based in New York City. As part of the Guess? portfolio, the rag & bone team will operate as an independent fashion brand with a focus on continuing to provide unique and timeless collections to its customers. 

The acquisition is subject to customary closing conditions, including regulatory approval, and is expected to close during the first quarter of Guess?’s 2025 fiscal year.