Believes the Company's Most Recent Presentation and Materials Fail to Address Reality
Notes That Guess Does Not Deny Any of the Allegations of Sexual Harassment and Assault Against Paul Marciano
Company's Statements that it "Takes Allegations of Sexual Impropriety or Unethical Conduct Extremely Seriously" and has a "Long Track Record" of Positive Governance Policies Are Directly Contradicted by Having Accelerated the Upcoming Annual Meeting Date by Two Months
Legion Believes it is Time for Shareholders to Make Their Voices Heard by Removing the Marciano Brothers and the Existential Risks They Represent to Guess' Brand, Reputation and Valuation
Urges Shareholders to WITHHOLD Their Votes on Paul and Maurice Marciano on the BLUE Proxy Card
LOS ANGELES, April 11, 2022 /PRNewswire/ -- Legion Partners Asset Management, LLC, together with its affiliates (collectively, "we" or "Legion Partners"), a significant shareholder of Guess?, Inc. ("Guess", or the "Company") (NYSE: GES), today issued an open letter to shareholders commenting on the Company's recent public materials. Legion believes the Guess Board of Directors' (the "Board") continued unwillingness to meaningfully address the issues at the heart of Legion's campaign further underscores the urgent need for shareholders to vote against the re-election of Paul and Maurice Marciano to the Board at the upcoming 2022 Annual Meeting of Shareholders (the "Annual Meeting").
Shareholders can find additional information at www.ABetterGuess.com.
The full letter states:
Dear Fellow Guess Shareholders,
Since we began our campaign, Legion has repeatedly articulated why we believe the growing list of sexual assault and harassment allegations against Paul Marciano, and the apparent enabling by his brother Maurice Marciano, represent an existential risk for the Company's brand, reputation and ability to create value for shareholders. We have also detailed why we believe the way Guess' Board has handled these allegations is at best wildly negligent and at worst a breach of the independent Board members' fiduciary duty. Consistently, the Board's response – both privately and publicly – has been that Legion does not have all the facts, and that our campaign is "uninformed.[1]"
Last week, in its publicly filed investor presentation, definitive proxy statement and other associated materials, the Company had its chance to set the record straight and reveal to us and other concerned shareholders exactly what those facts were. Instead, the Company chose to largely ignore the allegations against Paul Marciano and the Board's response – directly addressing these issues in only four slides among its nearly 50-page presentation.[2]
In lieu of answers, shareholders were largely treated to a marketing pitch extolling the many accomplishments of Paul and Maurice Marciano. Legion believes these materials ignore the reality of the situation the Company is facing and insult the intelligence of its shareholders.
Multiple times in its presentation, Guess attempts to makes the case that Paul Marciano is "essential" to the Company, highlighting his recent accomplishments of "brand elevation" and "consistency of product worldwide." Tellingly, the Company, and by extension the Board, does not even once deny the allegations of sexual harassment and assault against Paul Marciano or Maurice Marciano's apparent enabling of Paul's alleged conduct.
We believe there are numerous other false, confounding and misleading elements in the Company's materials:
"GES shares remain one of the cheapest stocks in our universe trading at 6.3x our forward EBITDA est. and we view this announcement constructively as it allows outside talent to come in and lead this founder-led company through a turnaround…. We applaud the Marciano brothers for the global lifestyle brand they have created over the last 35 years but believe fresh leadership at the top is needed to affect a turnaround--one where op margins should structurally be better." – Piper Jaffray, 7/14/2015"An Excellent Transition Plan, in Our View… We welcome fresh perspective from a new leader and believe Mr. Herrero can leverage his experience from Inditex Group to drive significant improvements at GES." – Jefferies, 7/15/2015
We believe now is the time to take action, and to ensure that Guess is positioned in the future to fulfill its significant potential. We look forward to continuing to engage with our fellow shareholders.
Chris Kiper Ted WhiteManaging Director Managing Director
Legion urges shareholders to support its efforts by signing, dating and returning the enclosed BLUE proxy card today to WITHHOLD their vote on the re-election of Paul and Maurice Marciano.
If shareholders have already voted for the Company's nominees, they have every right to change their vote by signing, dating and returning a later dated BLUE proxy card or by voting in person at the Annual Meeting.
If shareholders have any questions, require assistance in voting the BLUE proxy card or need additional copies of our proxy materials, please contact:
Saratoga Proxy Consulting LLC520 8th Avenue, 14th FloorNew York, NY 10018(212) 257-1311
Shareholders call toll-free at (888) 368-0379Email: info@saratogaproxy.com
About Legion Partners
Legion Partners is a value-oriented investment manager based in Los Angeles, with a satellite office in Sacramento, CA.Legion Partners seeks to invest in high-quality businesses that are temporarily trading at a discount, utilizing deep fundamental research and long-term shareholder engagement. Legion Partners manages a concentrated portfolio of North American small-cap equities on behalf of some of the world's largest institutional and HNW investors.
Investor Contact:John Ferguson / Joe MillsSaratoga Proxy Consulting(212) 257-1311jferguson@saratogaproxy.com / jmills@saratogaproxy.com
Media Contact:Longacre Square PartnersDan Zacchei / Joe Germanidzacchei@longacresquare.com / jgermani@longacresquare.com
[1] Guess Press Release. March 17, 2022.[2] Guess Investor Presentation. April 8, 2022.
View original content to download multimedia:https://www.prnewswire.com/news-releases/legion-partners-issues-open-letter-to-guess-shareholders-301522679.html
SOURCE Legion Partners Asset Management