In a setback for shoppers across the U.S., American apparel retailer Guess has announced it will be closing 20 stores this year as part of a bigger wave of fashion store closures. The firm has made an effort to close "underperforming stores" in an attempt to evolve with shifting consumer habits and financial stress in the retailing industry.

North American Stores fall under the Chop

Guess did not reveal which stores are closing, but the move is one step in a strategy to reduce its North American store number by around two dozen. The closure reflects a concerning trend for shoppers at retail stores—especially in the US and UK, where the brand has multiple stores remaining.

Guess CEO Carlos Alberini told a recent company call that the number of shoppers making in-store visits continued to decline. The company recorded revenues of $84 million during the 2024 fiscal year—a 30% drop compared to the previous year.

Financial Pressures and a Potential Lifeline

Guess's struggles are only a small part of a much bigger battle confronted by heritage fashion retailers. E-commerce competition, inflation, and changes in consumer behavior have caused fashion store closures throughout the world.

In response to its financial decline, Guess is currently considering a $663 million offer from WHP Global—the retail operating business behind brands like Toys R Us, Isaac Mizrahi, Vera Wang, and Anne Klein.

Retail analyst Neil Saunders said, "This is a classic move from WHP Global. They view Guess as a brand to grow through their model and distribution system. But there are a lot of things that need to be changed."

Guess's Global Expansion and Contraction Strategy

Currently, Guess has approximately 385 stores in the Americas and 1,553 worldwide. Known for its stylish but affordable apparel, Guess also offers shoes, accessories, and perfume items. However, despite having extensive international coverage, Guess is in a tizzy as shoppers increasingly shop online.

In addition to the U.S. shutdown, Guess also stated that it will be closing direct operations in the China market—a broader operational reorganization in an attempt to stabilize the business.

A Sign of the Times for Fashion Retail

The Guess case refers to a growing list of issues confronting middle-market fashion retailers trying to evolve in a changing consumer environment. As the company weighs its future and considers WHP Global's offer, consumers and employees wait for an answer.

One thing is sure—fashion store closures are no longer an isolated incident. They are becoming the rule of the day in a retail sector undergoing a significant shift.