A former top executive from Ann Taylor now heads Logistics at GUESS?. And finally, our new President and COO,
Carlos Alberini joined us from Footstar, a $2.6 billion footwear retailer. Our search for top talent continues, with
recent executive hires in the Design and Finance areas.
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Also in 2000, we opened a world-class distribution facility in Louisville, Kentucky. There were some growing
pains with the start-up, which resulted in significant additional costs, but our business was not interrupted during
the transition. We are proud to say that the facility is currently running smoothly and productivity is increasing.
Future opportunities
The GUESS? mission is to be a worldwide leader in the fashion industry. To support that
mission, we are committed to building a strong infrastructure. Our brand currently enjoys high customer accept-
ance, our image is outstanding and our business model is very powerful. We are vertically integrated. We have
multiple distribution channels for our products. And we currently have a worldwide presence and tremendous
long-term opportunities for enhanced profitability and growth.
These opportunities can be classified into two groups: those that relate to revenue growth, and those involving
operating efficiencies.
On the revenue side, GUESS? can expand significantly:
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Our retail store base is relatively small considering our current market penetration in the U.S., Canada, and
Puerto Rico. Our current stores are productive and profitable, so the business model is attractive. We believe we
can increase the sales productivity of our existing stores as well.
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The GUESS? brand can be extended into other merchandise categories such as fragrances, the GUESS?
Collection business, cosmetics and others.
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Internationally, the GUESS? brand is available in 42 countries and there are 427 GUESS? stores worldwide.
There is much untapped territory in the global marketplace, an opportunity we will approach with our licensing
business model -- which is extremely profitable and consumes little or no capital.
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Finally, our e-commerce business has been growing at a steady rate and now represents one of the top
"stores" in the Company. We envision healthy growth for this business as well.
On the operational side, GUESS? has identified a number of key strategies for increasing efficiency and
enhancing profitability:
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We launched a formal strategic planning process for goal-setting and accountability.
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We are strengthening the management team.
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We are restructuring operations to streamline our cost structure.
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We are planning to continue to upgrade our systems infrastructure.
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