GUESS_Prodecure_book_2024 by Guess Europe

WHOLESALE PROCEDURE BOOK

INTRODUCTION

The wholesale procedure book aims to provide a guideline to the most common commercial, operational and technical business models for internal use.

Our business, and especially our company, is continuously evolving, having new people joining every year, who need to be informed on the procedures in use.

Surely, every market is different, presenting its own peculiarities, and exceptions are always behind the corner, but through this procedure book we can make the whole business processes even more consistent.

1. CORPORATE WHOLESALE DEPT. STRUCTURE - pag. 4

2. SALES GENERAL INFORMATION - pag. 5

3. SALES TRACK PROCESS AND SUPPLY CHAIN FLOW – pag. 9

4. COMMERCIAL BUDGETING – STRATEGY AND CALENDAR – pag. 13

5. CENTRIC – BUDGETING AND FORECASTING – pag. 16

6. CUSTOMER SERVICE & COMMERCIAL OPERATIONS – pag. 22

7. CLIENTS SEGMENTATION & SELECTIVE DISTRIBUTION CRITERIA – pag. 26

8. COMMERCIAL CONDITIONS – pag. 30

9. CREDIT MANAGEMENT – pag. 38

10.TRADE MARKETING - BRAND VISIBILITY & BUDGETING – pag. 42

11.SHOP IN SHOP – pag. 54

12.FAST CAPSULES – pag. 58

13.OFF PRICE MANAGEMENT – pag. 62

14. TRAVEL RETAIL – pag. 66

15. PRICING – pag. 70

16. LICENSING – pag. 75

17. CONSIGNMENT – pag. 81

18. NO STRESS – pag. 86

19. BULK PROCESS – pag. 89

WHOLESALE DEPT. STRUCTURE

DEPARTMENTS

Corporate Area Managers

REFERENT

Olga Kuligina

Sales Operations

Vanessa Montuschi

Merchandising

Operations (Inventory, samples and WDP)

Andrea Mantegazza

Vice President

Trade Marketing

(including budgets) and Brand Visibility

Travel Retail and Off Price

Valentina Riparbelli

Planning and Analysis

Roberta Spinelli

TEAM, Activities and Specific Projects

Luisa Celi → France, UK & Ireland + Wholesale Procedure maintenance

Lilia Fumagalli → Turkey & East Med + No Stress/Data exchange Licensing

Serena Giannelli → Benelux & Swiss + Speaker to BU FTW/ACC

Anushka Mariconda → Germany, Austria & Scandinavia + Consignment, EDI/Nostress Key Accounts

Olga Kuligina → Russia, MEA & India + Commercial Projects and Inductions

Roberto Antognazza → Key Accounts and Distributors

Nicola Bertocchi → Field Customers

Ilaria Gaffuri → focus on GJ and Marciano

Francesca Guarducci → Speaker to Collegium, Guess USA + Commercial referent for Singapore, SEA + Team project India

Davide Grimaldi → Support to Off-price management

Elisabetta Piccinini → Development and maintenance of WDP

Lea Dukic

Letizia Tarantino

Martina Ciolli

Edoardo Borghetti

Francesco Muglia → France, Switz, Iberia, Uk&ire, International Region1 Mkts

Nicolo Rambaldi → CEE, Tk& Eastmd, Benelux, Scandinavia, MEA, International Region3 Mkts

Edoardo Borghetti → Italy, Germany&Austria, Russia, B2B markets

Sharon Pellegrini

Showroom

Shop in Shop and Corporate projects

Anzhela Nissen

Sabrina Viva

Anzhela Nissen → Speaker to BU Apparel, Product training

Aurelia Merlo

SALES General Information

Seasons

➢Year/1 (ie 2024/1) → Pre-Spring

➢Year/2 (ie 2024/2) → Main Spring-Summer

➢Year/3 (ie 2024/3) → Pre-Fall

➢Year/4 (ie 2024/4) → Main Fall-Winter

➢Commercial Priorities: ➢05 - B2C

➢10 - Property

➢15 - Top Account & Corners, distributor

➢20 - Multibrand (>50 x season) or strategic customer (Luxury, trend setter)

➢40 - Multibrand (<50 x season) or slow distributor

➢50 - Not stratefic customers, potential bad payer, order under minimum

➢99 - Orders received out of sales campaing, bulk

➢Order Proposal (Sales terms)

➢Authentication 2 Factors with WDP by mail and SMS code

SALES TYPOLOGIES: SELLING TYPES - SUB SELLING TYPES

✓Collection orders:

➢02-02 Wholesale

➢16 – 16 Corner

➢27 – 27 Licensing

➢40 – 40 B2B

➢16 – 31 Airport Shop

✓Reorders:

➢03-03 Wholesale

➢03 – 16 Corner

➢03 – 37 Licensing

➢43 – 43 B2B

➢03 – 31 Airport Shop

✓Swap:

➢03-04 Wholesale

➢03 – 36 Corner

➢03 – 47 Licensing

➢03 – 31 Airport Shop

✓Property:

➢19-19 Bulk Order

➢69-69 Initial Allocation

➢70-70 Reorders

➢19 –21 JV

✓Push Model:

➢19-39 Bulk Order

➢69-39 Initial Allocation

➢70-39 Reorders

✓Bulk Wholesale:

➢08-08

✓Capsule:

➢95-XX

➢18-XX

What: Sales campaing closure picture

Who: CS verify the orders / BI Create the picture

When: scheduled by Business Unit per line

What: Frozen – Cancellation Rate + Reorders

FROZEN SHIPMENT FORECAST

Who: Sales Team + Finance team

When: Sales budget submission

SALES TRACKING SHIPMENT BUDGET

What: Estimation of shipments in a specific period

Who: Customer Service

When: At the begining of each fiscal month

What: follow-up of shipment Forecast

Who: Customer Service

When: Every Monday

SALES TRACK PROCESS

The goal of the sales track process is to ensure that the Company FORECAST (submitted by the CS and announced to the Financial Community) will be achieved at monthly, but in particular way at QUARTER and YEARLY level.

FORECAST TIMELINE

Week

Week 1 of the month / quarter

Week 2

Week 3/4/5

Task

Customers Service define forecast based on Supply Chain assumptions and Country feedback (when needed)

Forecast Goals are shared with Corporate Sales Teams who will inform Local Teams for common commitment

Follow up

SALES TRACK PROCESS

FORECAST cannot easily be compared with the BUDGET, especially at montly/Country level.

This because the BUDGET on montly shipments is estimated and submitted at the beginning of the year, while the FORECAST is based on more concrete plans and shipments, that can be advanced or delayed across the year. If everythig is running correctly, every Country should be able to reach «YTD BUDGET» even if they do not reach every month the original monthly budget.

SUPPLY CHAIN FLOW

THE SALES TRACK PROCESS IS BASED ON DIFFERENT PLANS AND ASSUMPTIONS, THAT CAN BE

SUBJECTED TO CHANGES, SUCH AS :

1. INBOUND PLAN: PLANNING OF ALL THE GOODS ARRIVING TO THE WAREHOUSE

2. READY FOR ALLOCATION PLAN: PLANNING OF THE GOODS READY FOR ALLOCATION (AFTER DC INBOUND )

3. ASP ESTIMATION ON INBOUNDED GOODS

4. ESTIMATION OF UNBLOCKED CUSTOMERS

5. ESTIMATION ON PO CONFIRMED BY KEY ACCOUNT

6. PICK-UP CONFIRMATION (MAINLY EX WORKS)

SEASONAL PURCHASE ORDERS IN QTY TO VENDORS

BUDGETING

Strategy & Calendar

BUSINESS STRATEGY – CHANNEL STRUCTURE

20XX – COMMERCIAL YR TIME TO MKT

CENTRIC DEMAND PLANNING TOOL

Who is Centric?

Software company

Campbell, CA Headquarters

Specialized in PLM & Planning

Focus on Fashion (AFA) (96% of revenue)

# 1 PLM for Fashion in the world

600+ employees, group 20,000 employees

Presence Worldwide

AUSTRALIA | BANGLADESH | BELGIUM | BRAZIL |

MEXICO | NETHERLANDS | NORWAY | PORTUGAL |

RUSSIA | SINGAPORE | SOUTH AFRICA | SOUTH KOREA |

GUESS COMMERCIAL BUDGETING PROCESS

BUDGETS LEVELS DEFINITIONS

BUDGETS

DESCRIPTION

OPERATING PLAN (OP)

The Financial Plan is our annual projection of a complete divisional P&L Input, reviewed by EU Head of Channels and Country Managers

CHANNEL - AREA - LINE

Proposal from the headquarter (HQ) to the Sales Managers, stretched from OP and based on existing opportunities and trends

INTERNAL

It is an "achievable and ambitious" goal for the Sales Managers, stretched from OP and based on existing opportunities and trends

CHANNEL - AREA - LINE

EXTERNAL

Stretched from Internal budget at AGENT-LEVEL for the Sales Account

CHANNEL - AREA - LINE - AGENT

AGREED

CLOSING ESTIMATES / FORECAST

It’s the External Budget at CUSTOMER-LEVEL, in order to ensure us to have a "safety area" enabling us to achieve our internal goals for the Sales Accounts and Agents

SELLING CAMPAIGN STARTS

Weekly reviews of the Agreed budget to forecast the most realistic and accurate scenario in terms of sell in value and qty at the end of the selling campaign

The recommended order intake at the Forecast deadline is:

50% on Wholesale

80% on Licensing and Key Accounts/Dept. Stores

CHANNEL - AREA - LINE - AGENTCUSTOMER - GENDER

CHANNEL - AREA - LINE - AGENT

CENTRIC PLANNING - HOMEPAGE

KEY BUDGETING STEPS

CUSTOMER SERVICE & COMMERCIAL OPERATIONS: Key Activities

ACTIVITIES

SEASONAL ACTIVITIES

GENERAL ACTIVITIES

• Samples shipment

• Pricelists updates

• Set up of new Agency in Stealth and WDP

• CEF and new customer opening

• Check orders, allign the seasonal commercial conditions for each customer

• FROZEN

• Check of Order Proposal

• Order Confirmation

• POP and Trade Marketing Material management

• WDP and Microstrategy assistance

• Analisys of Arrival Plan

• Allocation, pick and pack process

• Special handling management

• Commercial & Administration Block monitoring

• Analisys of Arrival Plan

• Claims

• Returns

• Allocation, pick and pack process

• Commercial conditions finalization for each customer

• Special handling management

• Shipment Forecast

• Groupage management

• Weekly shipment reforecas and tracking

• Commercial Supports

• Reorders

• Provide the material requested for the Audit controls concerning approval flows of the orders, customer conditions, credit note and returns authorization

ACTIVITIES PRESALES

GENERAL ACTIVITIES

• Samples arrival plan

• Samples distribution and order entry

• Market calendar

• WDP set up for sales campaign opening

SEASONAL ACTIVITIES

DURING THE SALES CAMPAIGN STOCK MANAGEMENT

• Massive order cancellation

• Commercial communication by line

• Daily follow up with the business units to track changes, cancellations, etc… concerning the sales campaign

• Blind order launches on key categories in order to anticipate the Top customers’ needs.

• Monitoring supply and demand.

• Identifying best sellers early in the season, in order to ensure the right level of stock for full price reorders.

• Stock management for the Sales force in order to satisfy the market needs.

• Provide targeted analysis in order to keep the wholesale inventory level under control.

• Monitoring potential overbuy in order to compensate the lack of product trying to propose a good alternative and not loose potential sales.

• Tracking inventory movement and, in case, replenishing the current stock across channels in order to support the sales with the right product and limit the complaints by customers.

System: WDP – Wholesale digital platform

What is WDP: One unique integrated Platform to manage the end to end wholesale process

Sales Campaign Order Entry

CLIENTS SEGMENTATION

& SELECTIVE DISTRIBUTION

CRITERIA

(Brick and Mortar stores)

UPDATED SEGMENTATION

Department Store

B2B

Travel Retail

Multibrand

MULTIBRAND CHAIN

(replacing the categories Big Surface Textile, Multibrand Chain)

Omnichannel

Retail establishment offering a wide range of consumer goods in different product categories: clothing, furniture, home appliances, toys, cosmetics..

Multibrand customers that sell only through their own online platforms

Multibrand Stores located in Duty Free/Duty Paid areas

Small surface Apparel/fashion multibrand stores with less than 3 POS

Chain of apparel/fashion multi-brand stores (from 3 POS and up)

Customers with Omnichannel model, having more than 70% online Sales

Licensing Monobrand Stores operated by Third Parties

SELECTIVE DISTRIBUTION CRITERIA

In a selective distribution system, a distributor (or agent) is bound to sell and distribute the products received by the supplier exclusively to re-seller selected by such supplier according to certain Criteria (qualitative-in-nature, applied in uniform and non-discriminatory manner), aimed at preserving and safeguarding the reputation and quality standards of the relevant brand.

On such basis, Guess formalized its practise – already well-known and well established, considering that Guess already structured a selective distribution system in the EU – in specific selective distribution criteria. For the sake of transparency toward its partners, Guess decided to disclose its Criteria to the latters.

BRICK & MORTAR STORES SELECTIVE DISTRIBUTION CRITERIA:

Type of store

Brand / Category mix

Location of the store

Floor area of the store

Employees’ number and professional qualification

External appearance of the store

Internal appearance of the store

Overall impression of the store

Website of B&M Stores shall in any case meet the Online Stores Criteria (B2B Customers), even though with some simplifications.

The Online Stores (B2B Customers) Selective Distribution Criteria will be disclosed in due course.

SELECTIVE DISTRIBUTION CRITERIA

How to inform our Partners?

✓ Attach the criteria to the General Sales Terms.

✓ Publish the criteria in WDP.

Which are the benefits?

✓ Additional tools to evaluate our Wholesale Network.

✓ Transparency with Clients.

✓ Concrete protection of our Selective Network

COMMERCIAL CONDITIONS

Type of Conditions

Swaps Up to 15% 1 vs 1,2

One swap per season/collection Managed by Commercial letters 1 vs 1

Returns

Comm. Discount

Mkdown Contribution

Special agreements, needs to be managed one by one contract excluded, goal to convert into MKDC, managed one by one

Up to 5% ave

Upon special agreement

- managed by commercial letters

- We contribute 50% of sale discount ave

- Capped at ave 15%of the order

Upon special agreement, 12-13% ave

Reorders with Discount

Up to 30% seasonal order, min value respected, not cumulated with other discounts

Up to 20% on the leftovers ave

Up to 30%, discount based on stock level

COMMERCIAL CONDITIONS: Typologies

4. MARKDOWN (most common on French market, less on the remaining ones) GOAL:

▪ Permit the Customers to decrease the remaining stock end of season during sales period

▪ Enable customers to be aggressive on sales period, aligning to the market strategical operations GUESS GUIDELINE:

▪ Guess contributes 50% of the average sale discount

STANDARD TYPOLOGIES

1. Markdown before sales

It’s calculated on the full price stock left before the sales period starts in toto. (full price 60%, MKD 40%) The client must provide the planned sales discount % that will be applied during sales and we will contribute with 50% of the avarage %. A detailed list of the stock before sales must be provided by the client

a) Could be capped at ave 10-20% (the amount of MKD cannot overcome 10 or 20% of the seasonal order)

b) Could be based on agreed % based on the reached SELL OUT at Full price.

Example: -

COMMERCIAL CONDITIONS: Typologies

2. Markdown during the sales

It’s calculated on the stock sold only during the sales period, without considering leftovers (full price 60%, leftover 10%, MKD on 30%)

The client must provide the planned sales discount % that will be applied during sales and we will contribute with 50% of the avarage %.

A detailed list of the stock left before sales and immediately after the end of sales period must be provided by the client.

MOST

COMMON EXCEPTION: Markdown after sales

It’s calculated on the stock left after the sales period. (Full price 60%, sales 30%, MKD 10%)

The client must provide the planned sales discount % that will be applied during sales and we will contribute with 50% of the avarage %.

A detailed list of the stock left after sales must be provided by the client Examples from the practice:

On French market the avarage % markdown is 18%/19% (based on % going from 5% to 30%), just for Moms and paps.

Spain - MKD contribution just to El Corte Ingles – dpt store

1. The client transmits to Guess the list of stock as per the agreements:

• Level of stock before sales → in case of mkd before sales

• Level of stock before AND after sales → in case of mkd during the sales

Who: SALES DEPT. / AREA MANAGERS

1. The stock lists received must be checked and compared with the sell out figures received during the season

2. The MKD amount calculated must respect the percentage agreed as commercial condition

3. A recap of the calculation must be signed by the local Sales Manager / Country Manager and the VP Wholesale Sales, and transmitted to the Credit Department and Customer Service.

Who: CUSTOMER SERVICE / CREDIT DEPT.

1. The Customer Service raises the credit note authorization.

2. The credit dept. will deduct the credit note from the clients’ SOA

Exception: Some Dept. Stores and some Key Accounts will raise their own invoices instead of the CN

COMMERCIAL CONDITIONS: ApprovalThresholds

CREDIT MANAGEMENT

CREDIT OVERVIEW

MISSION: Support Wholesale team in maximizing sales minimizing credit risk, providing effective and efficient solutions on payment terms, collections, and managing credit risk through bank guarantees, L/C and Insurance coverage.

The Credit Dept., based in Switzerland (Bioggio) is managing all our whls Entities excluding GUESS ITALIA based in Italy (Florence)

Region 2 credit management is based on 3 main pillars:

• Credit Policy

• Webhelp/Allianz and direct collection/ insurance system in Europe Direct

• Collection through agent / Coface insurance in Italy

CREDIT POLICY

• Starting from the beginning GUESS decided to implement a common Credit Policy with the main rules to manage the business. The Policy, shared with the Commercial Teams and Agencies in Europe, considers the particularity of each Country.

• Credit policy covers the general rules. Any exception must be properly authorized by Credit Collection Director, VP Finance International or CFO, based on specific limits.

CREDIT POLICY – GUESS EUROPE

CREDIT COLLECTION – GUESS EUROPE

Guess Europe collection is managed with 3 methodologies:

➢ Outsourced to WPS (Webhelp Payment System) for West&Central European customers

• WPS is receiving electronically all invoices and manages cash collection.

• WPS is also providing payment bookings and AR line-item reconciliation which are uploaded electronically on our system;

• Money collected are sent to Guess Europe, Guess Spain and Guess UK twice a week.

➢ Direct for East European customers, licensing, distributors and some department stores

• Payment's collection and booking are managed directly by our Credit Team

➢ Direct for Guess Italia customers

• combination of agents and local credit management team

INSURANCE MANAGEMENT – GUESS EUROPE

Credit insurance is managed with 3 methodologies:

EUROPE

• For customers managed through WPS, we ask insurance coverage to Allianz

• WPS is also managing communication with Allianz about unpaid, refund etc.

• For customers manage directly: we have an insurance broker providing coverage through Zurich and Axa

ITALY

• Guess Italia insurance is provided by a broker (EON) through COFACE

• Relationship is managed directly by Guess Italia Credit Team

TRADE MARKETING

WHAT:OFFERTYPE

Soft Personalization

Customized solutions can be offered according to the store’s layout.

Events

Special Events can be organized in case of particular occurrences

Wholesale

Store Windows

Opportunity to have a dedicated store window.

Seasonal Poster Change

To keep ADV posters updated every season in every point of sales where we have a corner

Visual merchandising

New service that can support client’s visibility at least two/three times per season, for clients with an existing corner

Pop-up on request

Opportunity to have a temporary POP UP in store.

SOFT PERSONALIZATION

SOFT PERSONALIZATION are provided to customers where we’re not present with a corner but still there is a lack of branding. C ustomized solutions can be offered according to client’s layout

LOGO BLOCKS ARE designed to customize a small sales area (or a window) making the displayed products recognizable and connectable to our brand. Logo block basic offer available in stock, will be shipped FREE OF CHARGE upon request to TradeMarketing@guess.eu

REGULAR SOFT PERSONALIZATION 1

LOGO LETTERING SELF STANDING ACCESSORIES & FOOTWEAR

GUESS LOGO

RACK PERSONALIZATION

TRIANGLE LOGO SELF STANDING APPAREL KIDS

SEASONAL POSTER CHANGE

WHAT?

SEASONAL POSTER CHANGE are provided MANDATORY for ALL EXISTING SHOP IN SHOP. THE COUNTRY CAN EVALUATE ADDITIONAL WHL CLIENTS TO CONSIDER WHERE WE’RE PRESENT WITH AN ADV (CONSIDERING THE LOCATION AND THE PASSAGE FREQUENCY).

HOW?

ON OUR MARKETING IMAGE PORTAL (RETAILNOLOGY) YOU CAN HANDLE THE FULL PROCESS INCLUDING EXTERNAL VENDORS (FOR EVENTUAL PRINTING AND INSTALLATION). PLEASE REFER TO TRADEMARKETING@GUESS.EU FOR MORE INFORMATION.

SEASONAL POSTER CHANGE

PROCESS FLOW

VISUAL MERCHANDISING

WHAT?

VISUAL MERCHANDISING is to be provided MANDATORY for ALL EXISTING SHOP IN SHOP. THE COUNTRY CAN EVALUATE ADDITIONAL WHL STRATEGIC CLIENTS TO CONSIDER WHERE WE’RE PRESENT (CONSIDERING THE LOCATION AND THE PASSAGE FREQUENCY). THIS SERVICE CRUCIAL FOR A BETTER BRAND VISIBILITY AND STRONGLY RELEVANT TO SELL-THROUGH

HOW?

THROUGH EXTERNAL LOCAL AGENCIES

TRAINED FROM OUR CENTRAL VM TEAM. ON OUR MARKETING IMAGE PORTAL (RETAILNOLOGY) YOU CAN TRACK THE FLOW (STILL WORK IN PROGRESS)

BEFORE AFTER

POP-UP

WHAT?

FIXTURES THAT PERSONALIZE THE SPACE AND AT THE SAME TIME GIVE US THE OPPORTUNITY TO highlight & prioritize the seasonal product ON FLOOR We have 2 types of POP-UP:

1) POP UP as per our marketing calendar offer

HOW?

FOR STANDARD POP-UP YOU WILL BE CONTACTED FROM US TO CONFIRM THE FIXTURE IN CASE YOUR CLIENTS HAVE REACHED THE MINIMUM ORDER SET. FOR CUSTOMIZED POP-UP PLEASE TAKE CONTACT WITH TRADEMARKETING@GUESS.EU TEAM SHARING WITH US ALL THE PICTURES & TECHNICAL REQUIREMENTS.

2) TEMPORARY POP-UP based on client’s request

STORE WINDOW

COIN V GIORNATE, MILANO

ITALY

IN STORE EVENTS

PELLIZZARI

HQ SHARES BUDGET GUIDELINES WITH THE COUNTRIES

EACH COUNTRY SHOULD SHARE DESIDERED BUDGET IN DETAILS WITH HQ

HQ COLLECT ALL THE DETAILS AND ANALYZE THE REQUEST (IN CASE OF NEED SPECIFIC MEETING WILL BE ORGANIZED)

HQ CONFIRMS THE BUDGET TO EACH COUNTRY, IN CASE OF BUDGET REDUCTION WE SHOULD IDENTIFY WHICH ACTIVITY SHOULD BE CUT

EVERY END OF QUARTER HQ WILL SHARE WITH EACH COUNTRY THE ACTUAL STATUS OF THE BUDGET/INVOICES RECEIVED

BY THE END OF FISCAL YEAR EVERY COUNTRY SHOULD MAKE SURE THAT WE GET ALL THE INVOICES BY THE END OF JANUARY, ANY SAVING POSSIBILITY SHOULD BE COMMUNICATED PROMPTLY

PRIORITY BUDGET SEGMENTS

VISIBILITY

SHOP IN SHOP

CONCEPT TYPE

➢ LIFESTYLE 2019

(FOR APPAREL LINES )

Full customized Guess fixtures provided to create the same concept proposed in our property Retail stores

➢ GUESS JEANS “COMING SOON”

Modular standard fixtures freestanding and customized back wall where possible

➢ ACCESSORIES 2021

(FOR ACC. & FTW)

➢ KIDS 2021

(FOR KIDS LINE)

➢ MARCIANO 2021

(FOR MARCIANO LINE)

SHOP IN SHOP REQUESTS

Information to be provided:

- PICTURES OF THE INTERESTED AREA

- PANORAMIC PICTURES OF THE FLOOR (included pics of the neighbors Brands)

- PLAN OF THE SPACE TO BE FURNISHED (DWG FORM and PDF)

- PRE-CHECK LIST DESIGN FILE

- ANY ADDITIONAL INFORMATION OR ANY OTHER PARTICULARITY TO BE KNOWN ABOUT THE SPACE

SHOP IN SHOP TIMELINE

timing depending from layout changes required and the consequent approval from the Client and the

COMMERCIAL MANAGING FAST CAPSULE

WHAT IS FAST CAPSULE

FAST CAPSULE

The Fast Capsule is the fast selling during and out of the sales market for both chanells (Retail and Wholesale ). Styles are mostly added to actual collection by YC team and they are the styles with more commercial push and offer. Usually for Apparel lines.

NEW STYLES YC

ADDED STYLES TO EXPAND COLLECTION

ORDER COLLECTION PROCESS

STEPS TO FOLLOW

1- COMMUNICATION FROM YC MERCHANT TEAM TO US

2- CREATING DIGITAL MATERIALS TO SELL ( LOOKBOOK, PRICELIST ) BY MANAGER FAST TRACK

3- DEFINITION OF CHANNELS TO SELL IT BY APPROVAL OF WHL MANAGER

4- COMMUNICATION TO PARTNERS WITH ALL DETAILS AND DEADLINE

5- COLLECTING OF ORDES

6- SENDING OF ORDERS TO CUSTOMER SERVICE TO PUT ON SYSTEM (EXCEPT WHEN WDP IS OPENED TO INSERT ORDERS THERE DIRECTLY BY OUR PARTNERS)

7- CONFIRMATION FOR EACH ORDER INSERTED TO OUR PARTNERS

EXAMPLES DIGITAL TOOLS TO SELL

SALES BOOK PDF WHL

ALL INFORMATIONS FOR EACH STYLE

• STYLE CODE

• STYLE NAME

• COMPOSITION

• COLOR CODE

• SIZE RANGE

• RTL PRICE

• MOF

ORDER FORM WHL

OFF PRICE MANAGEMENT

• Old season stock liquidation

WHY ?

• Decrease warehouse inventory

HOW ?

• Off price business is fully handled centrally in the HQ

• Partnership with reliable partners.

• Acting in white spaces or with a silent distribution.

• Customized stock proposal depending on partner type/distribution.

Stock Origin

WHEN ?

➢ Piacenza and Venlo : Leftover

FW SEASON SS SEASON

➢ Jevaso : Reverse logistic in Spain where all the returns are scanned , checked and sorted .

After these first steps the returns are packed by style or sku and all the sales to the clients are done by prepacked boxes.

WHAT ?

WHERE ?

TRAVEL RETAIL

WHAT IS TRAVEL RETAIL ?

Duty free and travel retail is a global industry specialized in selling products to international travelers. Duty free store sales are tax-free and exempt from duties, on the condition that goods are only sold to travelers who will transport them out of the country.

Travel Retail channels are Airports, Airlines, Cruise Lines, Ferries, Border Stores and Diplomatic stores.

HOW TR is MANAGED IN GUESS

• Considering the pecularity of the business model (presence in more countries), TRAVEL RETAIL is managed locally but coordinated centrally

• Each global Travel retail partner has its point of reference within HQ Customer Service

• Every new location needs to be approved by HQ

• Every new commercial condition needs to be approved by HQ

• On Budget level the locations are are assigned to the Countries according to geografical principle

• Every change on commercial condition on local level needs to be comunicated to HQ/all the countries involved

The Country where Partner’s Head Office is located is following up commercially, but being the locations spread around Europe/world, we have to apply global input from the HQ. All commercial decisions are taken together with the Country.

PARTNER’S AND COUNTRY SHARES IN TRAVEL RETAIL BUSINESS

Commercial Conditions – Margin, Contract & CAPEX

- Guess EU used to sign Global Commercial Frame agreement with each Travel Retail partner across all the locations

- Guess might sign a partnership letter upon request of the partner to participate to the tender

- Before approving the location always check the presence of other TR operators in the airport

- Once tender is won, Guess might be requested to personalize the space in the corner

- Usually Guess requires a 3 years agreed Business Plan in order to justify CAPEX investments

- There are two international Travel retail fairs that take place in May in Singapore where Guess is represented by our Asian partner Escale and Jewelry dpt and in October in Cannes (Acc and Jew).

Travel retail business has quite low marginality for Guess but gives to the brand highest visibility.

Usually the partners request high discounts in order to justify high rent in the airport stores and reduced prices in DF.

The average requests from partner are:

- around 65-69% of MARGINS

- We aim to negotiate local decrease not exceeding 15%

- DAP

DEFINITION OF THE REFERENCE PRICE

BU are in charge of defining the correct price for each and every item.

We call this pricelist RT00.

Definition of RT00 is based on:

➢ Cost of product

➢ Margin requested by the Company

➢ Correct price positioning on EU market

Every BU has a basis MUP (i.e. Denim 2,5) and this defines the WL00: the reference WHS price to verify the GM for each and every item.

HOW DO WE CREATE ALL PRICELISTS ’ SETS?

Pricing team meets all relevant partners (i.e. Sales, BU themselves, Finance) in order to define the rules and roundings underlying the creation of pricelists’ set.

We create both Full Price and Outlet pricelist set.

Pricelists are created per STYLE (Model + Part): all colors and sizes belonging to a season have the same price in Guess!

EURO PRICELISTS

Retail Price must be one all over euro zone, so even when pricelists codes are different the content is the same.

WHS prices may change depending on the MUP every brand decided to grant to every market/Customer.

NON EURO PRICELISTS

In Region 2, we use 23 currencies. Each of them has a best practice in rounding and pricelists rules mirrors.

EXR are received from Finance Dept and on some of them we double check with Country Manager the best one to apply.

DID YOU SAY PRICE ?

MSRP

WHS PRICE

SAMPLE PRICE

ICO PRICE

The Retail price or Manufacturer Suggested Retail Price is the price used to sell to final customers.

Price used by Guess Europe to sell to any third-party customer. Rule is one country, one price. Commercial discounts can be applied on Sales request, general pricing structure is agreed with Country Managers/VP Wholesale.

Price used when Guess Europe sell samples sets to other Guess companies or third-parties.

Guess Europe SAGL is part of a wider structure. Sales to Guess owned Company are strictly ruled and the prices used are called Intercompany.

LICENSING

WHAT IS LICENSING?

Part of Wholesale channel, Licensing is based on the business cooperation between Guess and an external partner who is willing to open Guess Monobrand stores.

WHICH ARE THE ADVANTAGES OF LICENSING?

- Open stores in as many countries as possible

- Brand visibility

- Take advantage of the partner’s knowledge of his country

- No cost of store construction and no costs for employees

LICENSING STORE CONCEPTS

GUESS STORE

The store assortment is normally made up of Guess Jeans, Accessories Footwear. In some case stores have a Guess Kids, Marciano Corner and Underwear (Lifestyle Stores)

GUESS ACCESSORIES STORE

The store assortment is made up of Accessories and Footwear.

EDI CONNECTION:

GUESS KIDS STORE

The store assortment is made up of Kids Apparel and Accessories.

mandatory for consignment in order to receive sales reports

MARCIANO STORE

The store assortment is made up of Marciano, Accessories Footwear and a part of Guess Apparel.

LICENSING DATA SHARING

In order to evaluate the trend of each single store, Licensing partners are requested to share the data with the Company through:

▪MYSTORE

▪CSV TRANSMISSION

MYSTORE MAIN FUNCTIONS

MYSTORE is a very important and intuitive portal. The main functions for the partners are:

OPERATION = KPI’s entering

VISUAL MERCHANDISING = Guidelines and Visual Checks

TRAINING = Seasonal Product Videos

CSV DATA EXCHANGE

The goal of CSV FILES is to provide a communication protocol between the partner and Guess in order to share information on stock sales and orders.

CSV Files are text files representing a set of information: each row contains information about a business entity such as, for example, an order row or a sale.

The information flow has two directions: from Guess Headquarter to the Customer _so called OUTBOUND_ and back from the Customer to Guess Headquarter _ INBOUND

C O N S I G N M

CONSIGNMENT BUSINESS MODEL

WHAT IS A CONSIGNMENT?

• A consignment is an arrangement in which goods goods are given to a reseller (consignee) to sell, who agress to pay you proceeds from the sales minus a commission

• If products don’t sell the they can be returned

WHY DO WE CHOOSE IT?

If Partner does not want to take a financial risk of buying new products; allows you to test a new product/brand

It’s the only way for a brand to start a new business (ex. In a new market) especally if Partner is of high image and level for the brand

If pure WHS is not pofitable enough and consignment is more profitable

Partner does not want EOS leftovers

HOW DOES IT WORK

A CONSIGNMENT AGREEMENT SHOULD BE A PARTNERSHIP

GOODS ARE LEGALLY OWNED BY GUESS UNTIL FINAL SALE (ticket issued at cash register)

THE COMMISSION % IS PAID ON THE RETAIL PRICE NET OF VAT

GUESS SENDS THE SUGGESTED RETAIL PRICE

SALE OF GOOD RESULTS IN A PAYMENT OF A COMMISSION→% HAS TO BE NEGOTIATED UNSOLD PRODUCTS CAN BE RETURNED

VAT MANAGED BY GUESS TAX DEPARTMENT

WHICH ARE THE REQUIREMENTS?

CONTRACT: Commission % to be agreed (normally at leats 50% is required)

EDI CONNECTION: mandatory for consignment in order to receive sales reports

PROCESS: clear accounting and logistics process for both parties

DATA EXCHANGE - EDI

-EDI stands for Electronic Data Interchange. It enables companies to exchange business documents with business partners.

-EDI order process allows computer-to-computer exchange of business documents from one company to another, thereby enabling automated papreless communication. Businesses that communicate electronically are called EDI trading partners

-Manual data entry can be time consuming and can naturally be associated with human errors, EDI can make the entire order processing and fulfillment faster and more efficient

-EDI Benefits: improved order accuracy, better operational efficiency, faster communication, shorter order processing time, lower transaction costs, stronger customer relationships and improved customer satisfaction

NO STRESS

NOSTRESS

Originally studied for Retail and adapted for Wholesale business’

needs No Stress is a cloud based application where both data at top level but also on product level are at disposal. The version for Wholesale channel is based on the existing data transmission : CSV exchange for Licensing and EDI for Key accounts and Department Stores. The data for Wholesale are updated once per week.

WHOLESALE CHANNEL DATA EXCHANGE

EXTERNAL ENVIRONMENTS

GUESS ENVIRONMENTS

NOSTRESS

• Automatic acquisition last 4 weeks.

• Hystorical data acquisition by manual action

EDICOM

BULK PROCESS

BULK TYPOLOGIES

A Wholesale Bulk can be considered as a stock replenishment order made of fabric production with all final yarns, final colors, and final finishing, requested by and allocated key accounts during each selling campaign