Broader Industry Environment

Broader industryenvironment

The apparel retail industry is competitive with a large number of competitors. Within the United States it includes one million stores and accounts for four trillion dollars in revenue in 2012. The industry is characterized by emphasizing diversity and trend fashion. Along with diversity, most of the competitors tend to rely on their brand image. The threat of new competitors is relatively low due to the high start-up costs of entering the market, and this industry by nature is fragmented, thus it is very difficult to compete in. Since Gap inc. and Guess inc. tend to have high quality brand image, they two have power over their suppliers, due to manufactures competing for business.

Economic and market conditions have become increasingly volatile and uncertain in the world market and consumer behavior remains cautious from 2008. In North America, the weaker levels of consumer confidence and the highly promotional conditions among retailers may persist for an extended period. The whole industry anticipates that inflationary pressures on raw materials, labor, freight and other commodities including oil, experienced at the beginning of fiscal 2011, but starts recovering at the end of 2011

Industry also continue to experience significant volatility in the global currency markets. Since majority of international operations are conducted in currencies other than U.S dollar, currency fluctuations can have a significant impact on the translation of companies' revenues and earnings into U.S. dollar amounts.

Brief company introduction

Guess

Guess inc. was founded in 1981 and currently operate as a Delaware corporation. Guess design, marked, distribute and license one of the world's leading lifestyle collections of contemporary apparel and a accessories for men, women and children that reflect the American lifestyle and European fashion sensibilities. It is marked under numerous trademarks including Guess, Guess Jeans, Triangles Design, and so on. Guess products are sold through retail, wholesale, e-commerce and licensing distribution channels. Its core customer is a style-conscious consumer primarily between the ages of 18 and 32. Guess with 504 directly operated stores in the U.S and Canada as of January 28,2012.

Despite the difficult economic conditions, Guess's key long-term strategies remain unchanged. Global expansion continues to be the cornerstone of their long-term growth strategy. The combined revenue outside of the U.S and Canada represented almost half of the total company's revenues in 2012. They expect to continue to develop in both existing European and Asia markets. At the same time, Guess plan to expand markets in emerging countries like China, Brazil, Russia and Indian.

Gap

Gap