Guess Corp.: Readers React
By Greg Lindenberg on Sep. 10, 2016CHICAGO -- There is no shortage of opinion on Guess Corp., the diamond-dealer-turned-would-be-convenience-store retailer whose entry onto the industry playing field has created confusion, consternation and concern … and has provided no small degree of comedy.
Guess burst onto the scene this summer with an ambitious plan to acquire 1,000 c-stores within a year, and it has announced two ambitious c-store design concepts catering to “luxury” and “ultra-luxury” consumers.
These goals have strained the collective credulity of the industry, especially because the company has yet to open a single location or tout a single acquisition. (We’ve dubbed them a “pre-retailer” or “pretailer.”)
CSP Daily News asked readers to offer comments and opinions on Guess Corp.—coming out of nowhere with a seemingly endless pipeline of announcements—and our coverage of them.
Here is a selection of the comments:
Your articles on The Guess Corp are extremely entertaining.
There is a simple sniff test that the company does not pass relating to its existing businesses.
It claims to have major business lines that include “private jets, yachts, automobiles, fine art, private islands, casinos, hotels, publishing and lumber, among others” and “projected revenue for 2016 of $250 million and an asset base that currently exceeds $100 million.”
The revenue and asset base make no sense in the context of its “business lines,” considering a single private jet can cost in the tens of millions of dollars … not to mention “yachts, fine art, private islands, casinos.”
I think this situation illustrates the “power of the press release” – i.e., you can pay a couple hundred dollars to get a press release on the Internet, and you hope that the media then picks up and “legitimizes” your story.
--Elliott Collyer, strategy and corporate development, Parkland Fuel Corp.
Seems like a hoax—especially this $50 million thing—but seems like a lot of effort for this kind of hoax.
--Chris Keating, chief brand officer, Winsight, Chicago
Summer who? Guess who? No bricks and mortar? No traceable industry vets? Who is that masked man? Who cares?
--Dick Meyer, president, Meyer & Associates, Mesa, Ariz.
I think you and your readers should Google “Jerry D. Guess.”
--Donald L. Plunkett Jr., CCIM, Congress Realty Inc., Scottsdale, Ariz.
Your editorial approach is very good. You have to allow for the possibility that Guess’ announced plans are for real. They have clearly spent money on design so it is difficult to understand what other reason they would have than a serious intent to enter the field. On the other hand, one thing is certain: if they do move forward, it will be a colossal failure. Also, unlike Tesco, which was a large enough well-established company to survive a major disaster, Guess has a total estimated sales volume for 2016 (probably exaggerated) of $250 million with an asset base of $100 million, spread over 20 different business categories, so it is difficult to see how they could survive a failure of the magnitude that this would inevitably be--or even finance a startup and rollout of their stated plans during the initial losses that even an ultimately successful project would generate.
Their ultimate plan to build 250 of the upscale facilities aimed at $50 million net worth households, when there are only a total of 45,000 such households in the U.S.—and probably 100,000 in the entire world--seems to be a deliberate attempt to test the credibility of the media. It calculates to a total target market of 400 for each of these extraordinarily expensive facilities—or one for 40, based on capturing 10% of that market, worldwide.
Even considering any of the types of facilities they have announced as being in the convenience-store business, is wrong. In retail in general, and c-stores in particular, stores are not for particular types of people, they are for particular kinds of needs. By definition, anyone who drives or walks past a c-store is a potential customer, if they have a need for something it offers. The Guess facilities are not meant to serve such needs. They are destinations for upscale customers and unwelcoming to mere mortals who happen to be passing by.
While everything about this series of announcements seems to be fantasy--even the name of the senior EVP and chief development officer being “Cutie”--I understand why you have to allow for the fact that this could be a serious business development; however, I can only conclude that there is some other motivation behind it and that the real story will be finding out what that motivation is.
--Gerald Lewis, New York
CSP is wise to add a disclaimer at the bottom of each Guess press release or story. Have they done the economics of a gas/c-store/luxury goods retail site? And how many $50M+ households are there in the U.S., and how do those household members shop? Even affluent C-store/gas customers are not looking to linger and “shop." Like all customers, they want to get to their destination, and the convenience store is not it.
I could argue that their upscale concept could work in highly affluent areas around the country—Greenwich, Conn., Alpine, N.J., eastern Long Island or Lower Westchester County, N.Y., Beverly Hills, River Oaks, etc. This handful of communities across the country could support maybe 10 locations. But even if the large 1 acre+ parcel with ample parking, on a high-traffic artery and on a corner that Guess needs in this scenario is available, the cost to buy or lease and build, would be astronomic. And we can honestly say that these properties are generally not available, making their plan confusing to say the least. And from a timing standpoint it’s a 10-year+ plan at best under optimal conditions.
--Ken Shriber, managing director and CEO, Petroleum Equity Group, Chappaqua, N.Y.
Several readers offered links to fraud websites and LinkedIn profiles of Guess executives, as well. Other readers, who wished to remain anonymous, called us with their theories and about encounters with Guess that—to say the least—add new layers of mystery to an already weird story.