California-based Guess has entered into a EUR250m revolving credit facility through its wholly-owned Swiss subsidiary, Guess Europe Sagl. The facility has an initial term of five years, with an option to extend the maturity date by up to two years and an option to expand the facility by up to EUR100m, subject to certain conditions. The new facility replaced certain short-term borrowing arrangements with various banks totalling EUR120m.
The Guess Sustainability Plan focuses on three key pillars: Operating with Integrity, Empowering our People, and Protecting the Environment. In line with the third pillar, the interest rate for the new facility will be subject to an annual adjustment based on the achievement of specific sustainability goals aimed at reducing greenhouse gas emissions, increasing the use of sustainably sourced materials, and increasing the penetration of the company’s Guess Eco products.
CEO Carlos Alberini says: “Our new EUR250m European credit facility reflects the importance of the European region to our overall company as our largest segment, as well as our lenders’ confidence in our strategy.
“We remain highly committed to our goal of protecting the environment and see sustainability as fully integrated into our operations. This new credit facility will not only provide incremental access to longer-term capital but will also align financial incentives with our sustainability goals. In our company, we continue to make every decision and take every action with the long-term in mind.”
Guess unveiled a series of new sustainability commitments under its new Vision Guess plan last summer, including replacing virgin polyester with recycled materials, increasing sustainable denim offerings to 75% within three years, and reducing supply chain emissions by 30% by 2030.
The company is the latest to link its financing to sustainability, with Spanish fashion retailer Mango making a similar move last month, having refinanced its debt and, for the first time in its history, linking it to environment, social and corporate governance (ESG) criteria.
A number of brands and retailers have made similar moves with regard to their financing in recent months. German luxury fashion brand Hugo Boss took out a revolving syndicated loan with a sustainability focus for the first time in December, while the John Lewis Partnership signed a GBP420m five-year revolving credit facility linked to environmental targets in November.