AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 3, 1996

REGISTRATION NO. 333-4419

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------
GUESS ?, INC.
(Exact name of registrant as specified in its charter)

DELAWARE                       2345                      95-3679695
(State or other             (Primary Standard            (I.R.S. Employer
jurisdiction of                Industrial             Identification Number)
incorporation or        Classification Code Number)
organization)

1444 SOUTH ALAMEDA STREET
LOS ANGELES, CALIFORNIA 90021
(213) 765-3100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

ROGER A. WILLIAMS
CHIEF FINANCIAL OFFICER
GUESS ?, INC.
1444 SOUTH ALAMEDA STREET
LOS ANGELES, CALIFORNIA 90021
(213) 765-3100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------------

COPIES TO:

William H. Hinman, Jr., Esq.                            Gregg A. Noel, Esq.
Shearman & Sterling                                Jeffrey H. Cohen, Esq.
555 California Street                        Skadden, Arps, Slate, Meagher & Flom
San Francisco, California 94104-1522                 300 South Grand Avenue, Suite 3400
Los Angeles, California 90071

--------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
--------------------------

If  any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to  Rule 415 under the Securities Act  of
1933, check the following box. / /

If  this Form  is filed  to register  additional securities  for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration statement  number  of  the  earlier
effective registration statement for the same offering. / /

If  this Form  is a post-effective  amendment filed pursuant  to Rule 462(c)
under the Securities Act,  check the following box  and list the Securities  Act
registration  statement number  of the earlier  effective registration statement
for the same offering. / /

If delivery of the prospectus is expected  to be made pursuant to Rule  434,
please check the following box. / /
--------------------------

THE  REGISTRANT HEREBY  AMENDS THIS REGISTRATION  STATEMENT ON  SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A  FURTHER  AMENDMENT  WHICH SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT  SHALL THEREAFTER BECOME EFFECTIVE IN  ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT  OF 1933,  AS AMENDED,  OR UNTIL  THE REGISTRATION  STATEMENT
SHALL  BECOME EFFECTIVE ON SUCH DATE AS  THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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GUESS ?, INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K

ITEM
NUMBER                           ITEM                                        LOCATION IN PROSPECTUS
- ---------  --------------------------------------------------  ----------------------------------------------------

1.     Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus...................  Facing  Page;  Cross-Reference Sheet;  Outside Front
Cover Page of Prospectus
2.     Inside Front and Outside Back Cover Pages of
Prospectus.......................................  Inside Front  Cover Page  of Prospectus;  Additional
Information;  Table of Contents; Outside Back Cover
Page of Prospectus
3.     Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges........................  Prospectus Summary; Risk Factors
4.     Use of Proceeds...................................  Prospectus Summary; Use of Proceeds
5.     Determination of Offering Price...................  Underwriting
6.     Dilution..........................................  Dilution
7.     Selling Security Holders..........................  Not Applicable
8.     Plan of Distribution..............................  Outside Front Cover Page of Prospectus; Underwriting
9.     Description of Securities to Be Registered........  Outside Front Cover  Page of Prospectus;  Prospectus
Summary; Description of Capital Stock
10.     Interests of Named Experts and Counsel............  Not Applicable
11.     Information with Respect to Registrant............  Prospectus  Summary; Risk  Factors; Company History,
the Reorganization and Prior S Corporation  Status;
Dividend Policy; Capitalization; Selected Financial
Data;    Selected   Pro   Forma   Financial   Data;
Management's Discussion and  Analysis of  Financial
Condition  and  Results  of  Operations;  Business;
Management;   Certain    Transactions;    Principal
Stockholders;  Shares  Eligible  for  Future  Sale;
Description of Capital Stock; Financial Statements
12.     Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities......................................  Not Applicable

------------------------

This Registration Statement contains two forms of prospectus: one to be used
in connection  with an  offering in  the  United States  and Canada  (the  "U.S.
Prospectus")  and one  to be  used in a  concurrent offering  outside the United
States and Canada (the "International Prospectus"). The U.S. Prospectus and  the
International  Prospectus will be identical in all respects except for the front
and back cover  pages and  the "Underwriting"  section. The  U.S. Prospectus  is
included  herein and is followed by those  pages to be used in the International
Prospectus which differ from those in the U.S. Prospectus. Each of the pages for
the International Prospectus  included herein has  been labeled "Alternate  Page
for International Prospectus."

Information   contained  herein  is  subject   to  completion  or  amendment.  A
registration statement  relating to  these securities  has been  filed with  the
Securities  and Exchange  Commission. These securities  may not be  sold nor may
offers to buy be accepted prior  to the time the registration statement  becomes
effective.  This  prospectus  shall  not  constitute an  offer  to  sell  or the
solicitation of an offer to buy nor shall there be any sale of these  securities
in  any state in which such offer,  solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 3, 1996

PROSPECTUS
9,200,000 SHARES

[LOGO]

COMMON STOCK
------------------

Of the 9,200,000  shares of Common  Stock of Guess  ?, Inc. offered  hereby,
7,360,000  shares are initially being offered in the United States and Canada by
the U.S. Underwriters and 1,840,000  shares are initially being offered  outside
the  United States and Canada by  the International Managers. The initial public
offering price and the aggregate  underwriting discount per share are  identical
for each of the Offerings. See "Underwriting."

Prior  to the  Offerings, there  has been  no public  market for  the Common
Stock. It is  currently estimated  that the  initial public  offering price  per
share  of Common  Stock will be  between $21  and $23. See  "Underwriting" for a
discussion of the  factors to be  considered in determining  the initial  public
offering price of the Common Stock.

The  Company has  applied to  list the  Common Stock  on the  New York Stock
Exchange.

SEE "RISK FACTORS" BEGINNING ON PAGE  7 FOR A DISCUSSION OF CERTAIN  FACTORS
THAT  SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
---------------------

THESE SECURITIES  HAVE  NOT  BEEN  APPROVED OR  DISAPPROVED  BY  THE  SECURITIES
AND   EXCHANGE  COMMISSION  OR  ANY   STATE  SECURITIES  COMMISSION,  NOR  HAS
THE  SECURITIES   AND   EXCHANGE   COMMISSION  OR   ANY   STATE   SECURITIES
COMMISSION    PASSED   UPON   THE   ACCURACY   OR   ADEQUACY   OF   THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PRICE TO         UNDERWRITING        PROCEEDS TO
PUBLIC          DISCOUNT (1)        COMPANY (2)

Per Share...........................          $                  $                  $
Total (3)...........................          $                  $                  $

(1) The Company  and the  Principal Stockholders  have agreed  to indemnify  the
several   Underwriters  against   certain  liabilities,   including  certain
liabilities  under   the   Securities  Act   of   1933,  as   amended.   See
"Underwriting."

(2) Before deducting expenses payable by the Company estimated to be $         .

(3)  The  Company has  granted to  the U.S.  Underwriters and  the International
Managers options,  exercisable  within  30  days  after  the  date  of  this
Prospectus,  to purchase up to an additional 1,104,000 and 276,000 shares of
Common Stock, respectively, to  cover over-allotments, if  any. If all  such
additional  shares are  purchased, the  total Price  to Public, Underwriting
Discount and Proceeds to Company will be $         , $       and $         ,
respectively. See "Underwriting."
------------------------

The  shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as  and if issued to and  accepted by them, and subject  to
the  approval  of certain  legal  matters by  counsel  for the  Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and  to reject orders in whole  or in part. It is  expected
that  delivery of the shares of Common Stock  will be made in New York, New York
on or about            , 1996.

------------------------

MERRILL LYNCH & CO.  MORGAN STANLEY & CO.
INCORPORATED
----------------------------------

The date of this Prospectus is            , 1996.

[PICTURES]

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR  EFFECT
TRANSACTIONS  WHICH STABILIZE OR  MAINTAIN THE MARKET PRICE  OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT  WHICH MIGHT OTHERWISE PREVAIL IN THE  OPEN
MARKET.  SUCH TRANSACTIONS  MAY BE  EFFECTED ON THE  NEW YORK  STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2

PROSPECTUS SUMMARY

THE  FOLLOWING SUMMARY  IS QUALIFIED  IN ITS  ENTIRETY BY  THE MORE DETAILED
INFORMATION AND  FINANCIAL STATEMENTS  (INCLUDING THE  NOTES THERETO)  APPEARING
ELSEWHERE  IN THIS  PROSPECTUS. UNLESS OTHERWISE  NOTED, ALL  COMMON STOCK SHARE
AMOUNTS, PER SHARE DATA AND OTHER  INFORMATION SET FORTH IN THIS PROSPECTUS  (I)
HAVE  BEEN ADJUSTED TO REFLECT A       FOR 1 STOCK SPLIT, WHICH WILL BE EFFECTED
PRIOR TO CONSUMMATION OF THE OFFERINGS,  AND (II) ASSUME THAT THE  UNDERWRITERS'
OVER-ALLOTMENT  OPTIONS  HAVE NOT  BEEN EXERCISED.  UNLESS THE  CONTEXT REQUIRES
OTHERWISE, THE "COMPANY" OR "GUESS," AS USED IN THIS PROSPECTUS, MEANS GUESS  ?,
INC.  AND GUESS EUROPE,  B.V., A NETHERLANDS  CORPORATION ("GEBV"), GUESS ITALIA
S.R.L., AN ITALIAN CORPORATION ("GUESS  ITALIA," AND TOGETHER WITH GEBV,  "GUESS
EUROPE"),  AND  RANCHE  LIMITED, A  HONG  KONG CORPORATION  ("RANCHE"  OR "GUESS
ASIA"), EACH OF WHICH IS A CONSOLIDATED SUBSIDIARY OF GUESS ?, INC.

THE COMPANY

Guess ?, Inc. (the  "Company" or "Guess"), founded  in 1981 by the  Marciano
brothers,  designs, markets, distributes and licenses one of the world's leading
lifestyle collections  of  casual  apparel,  accessories  and  related  consumer
products. The Company's apparel for men and women is inspired by an appreciation
of  the American lifestyle combined with a  European flair and is marketed under
the trademarks  GUESS,  GUESS  U.S.A.,  GUESS? AND  TRIANGLE  DESIGN  and  GUESS
COLLECTION.  The lines  include full collections  of denim  and cotton clothing,
including jeans,  pants, overalls,  skirts,  dresses, shorts,  blouses,  shirts,
jackets  and  knitwear.  In  addition,  the  Company  has  granted  licenses  to
manufacture and  distribute  a  broad  range of  products  that  complement  the
Company's  apparel lines, including watches,  clothing for infants and children,
eyewear, footwear, activewear, home products and other fashion accessories.  The
Company's  product  quality combined  with  captivating advertising  images have
created a global brand  franchise with products  that appeal to  style-conscious
consumers  across a  broad spectrum of  ages. The Company  generates net revenue
from wholesale and retail operations  and licensing activities, which  accounted
for  56%, 35% and 9%, respectively, of  net revenue in 1995. The Company's total
net revenue in 1995 was $486.7 million and pro forma net earnings (as  described
herein) were $43.3 million.

The  Company  achieves  premium  pricing  for  its  products  by emphasizing
superior styling and quality.  The Company maintains  rigorous control over  the
quality of its products by performing its own design and development work and by
closely  monitoring  the  workmanship  of  its  contractors  and  licensees. The
enduring strength  of  the GUESS  brand  name and  image  is reinforced  by  the
Company's  consistent emphasis on  innovative and distinctive  design. Under the
direction of  Maurice Marciano,  the Company's  design department  creates  full
lines  of casual  apparel that appeal  to both  men and women.  During 1995, net
sales of apparel for men and for women accounted for approximately 48% and  52%,
respectively,  of net  revenue from  the sale of  apparel products.  Each of the
lines consists of a broad array of basic, recurring styles, complemented by more
fashion-oriented items which reflect contemporary trends. During 1995, net sales
of  basic  and  fashion   items  accounted  for   approximately  49%  and   51%,
respectively, of the Company's net revenue from the sale of apparel products.

The  Company seeks to reach a  broad consumer base through multiple channels
of distribution. As of March 31, 1996, GUESS brand products were distributed  by
the  Company, its licensees and  international distributors to better department
stores and upscale  specialty stores,  112 stores  operated by  the Company  (of
which  65 were retail stores  and 47 were factory  outlet stores) and 205 stores
operated  by  licensees  and  distributors.   As  a  critical  element  of   its
distribution  to  department  stores,  the  Company  and  its  licensees utilize
shop-in-shops to enhance brand  recognition, permit more complete  merchandising
of  the  lines  and differentiate  the  presentation  of GUESS  products.  As of
December 31,  1995, the  Company's  and its  licensees'  products were  sold  in
approximately 1,600 shop-in-shops worldwide. In order to protect the Guess image
and  enhance the exclusivity of the brand, the Company began in 1993 to withdraw
its products from certain  wholesale accounts which did  not meet the  Company's
merchandising   standards.  Sales  to  such  discontinued  accounts  represented
approximately $51.1 million, $32.9 million and $3.8 million of the Company's net
revenue in  1993, 1994  and 1995,  respectively. The  Company's own  network  of
stores,  in  addition to  providing  a key  opportunity  for growth,  allows the
Company to present and merchandise its entire collection and to test market  new
product concepts.

3

The  Company intends to capitalize on the worldwide recognition of its brand
name and the breadth of Guess lifestyle products by expanding its  international
operations.  The Company has established Guess Europe in Italy and Guess Asia in
Hong Kong to design, source and market  products in Europe and the Pacific  Rim.
Guess  has  granted  licenses for  the  manufacture  and sale  of  GUESS branded
products similar  to  the  Company's,  including men's  and  women's  denim  and
knitwear,  in markets such as Canada,  Argentina, Mexico, the Philippines, South
Korea, Brazil  and  Japan.  Although  Guess  is  in  the  early  stages  of  its
international  expansion, GUESS  brand products  are currently  sold in  over 70
countries primarily through licensees and distributors.

The desirability of  the GUESS brand  name among consumers  has allowed  the
Company   to  selectively   expand  its  product   offerings  through  licensing
arrangements. The Company believes its licensing strategy significantly broadens
the distribution of GUESS  brand products while  limiting the Company's  capital
investment  and operating expenses. The Company carefully selects its licensees,
maintains  strict   control  over   the  design,   advertising,  marketing   and
distribution  of  all  licensed  products and  requires  all  licensees  to make
significant investments  in advertising,  promotion and  marketing in  order  to
maintain  a  consistent global  GUESS brand  image.  The Company's  26 licensees
manufacture and distribute  a broad array  of related consumer  products in  the
United States and international markets. The Company's most significant licenses
include  GUESS WATCHES, BABY GUESS, GUESS KIDS and GUESS EYEWEAR, which together
accounted for approximately 48.1%  of the Company's net  royalties in 1995.  The
Company continues to capitalize on the GUESS brand image by granting licenses to
introduce  related  products.  Recently,  the Company  licensed  the  GUESS HOME
COLLECTION and GUESS OUTERWEAR, as well as various accessory products.

Under Paul  Marciano's  direction  and  supervision,  Guess  has  created  a
consistent,  high profile  image through  the use  of its  distinctive black and
white print ads. The Company's in-house Advertising Department directs the media
placement of all advertising worldwide, including placement by its licensees and
distributors. On numerous  occasions since 1986,  the Company's advertising  has
garnered  prestigious  awards, including  CLIO,  BELDING and  MOBIUS  awards. By
retaining control over its advertising programs, the Company is able to maintain
the integrity  of the  GUESS  brand image  while  realizing a  substantial  cost
savings  compared to the  use of outside  agencies. From 1992  through 1995, the
Company's advertising expenditures, together with amounts spent by its licensees
and its  distributors  (as  reported  to  the  Company  by  such  licensees  and
distributors), exceeded $160 million.

The   Company's  business  strategy  is   designed  to  increase  sales  and
profitability, while preserving  the integrity and  expanding the product  depth
and  global reach of the  GUESS brand. To provide  greater management depth, the
Company has recently recruited several key executives with substantial  industry
experience  to  faciliate  the  implementation  of  its  business  strategy. The
business strategy consists of the following  key elements: (i) to maintain  high
brand  recognition, (ii) to increase international operations through increasing
sales to existing and new distributors, increasing royalties from the growth  of
licensees'    businesses,    increasing    the   number    of    licensee-   and
distributor-operated retail stores and shop-in-shops and expanding direct  sales
penetration  through Guess Europe, (iii) to increase both product and geographic
licensing arrangements,  (iv)  to  deepen the  Company's  product  offerings  to
include  new  fabrications and  product  lines, (v)  to  expand and  improve the
productivity of the Company-operated retail and factory outlet store network and
(vi) to expand and upgrade domestic shop-in-shops.

COMPANY HISTORY

Maurice, Paul  and Armand  Marciano  (the "Principal  Executive  Officers"),
together  with their brother Georges, began in the apparel business in France in
1972 and opened their first retail apparel  stores in the United States in  1978
in  California.  The business  of  GUESS was  founded  in 1981  by  the Marciano
brothers. The Company  was founded on  the concept  of a fashion  jean with  the
first  GUESS product being the "three-zip  Marilyn" jean, which was stone-washed
and adapted  to  fit the  contours  of a  woman's  body. Since  that  time,  the
Company's  product  offerings have  grown  to include  full  lines of  men's and
women's casual apparel. In  August 1993, Georges Marciano  sold his interest  in
Guess to the Company and a trust for the benefit of Paul Marciano.

4

THE OFFERINGS

Of  the 9,200,000 shares of Common Stock,  par value $.01 per share ("Common
Stock"), to  be sold  in the  Offerings, 7,360,000  shares are  initially  being
offered  in the  United States  and Canada by  the U.S.  Underwriters (the "U.S.
Offering") and 1,840,000 shares are  initially being offered outside the  United
States  and Canada by the  International Managers (the "International Offering,"
and together with the U.S. Offering, the "Offerings").

Common Stock offered by the Company hereby..........  9,200,000 shares
Common Stock to be outstanding after the Offerings
(1)................................................  shares
Use of proceeds.....................................  The estimated  net  proceeds  to  the
Company  of  $188.0  million  will be
used  to  repay  the  S  Distribution
Notes  (as defined herein) (estimated
to have an aggregate principal amount
between  $          million   and   $
million).  Any remaining net proceeds
will be used to repay outstanding ad-
vances under the Company's  revolving
credit facility.
Listing.............................................  The  Company has applied  to list the
Common Stock  on the  New York  Stock
Exchange ("NYSE").

- ------------------------

(1)  Excludes  approximately        shares of Common Stock reserved for issuance
pursuant to  awards under  the Company's  1996 Equity  Incentive Plan  (the
"1996 Equity Plan") and 1996 Non-Employee Directors' Stock Option Plan (the
"Directors'  Plan"), including options to  purchase        shares of Common
Stock to be granted  immediately prior to the  Offerings. Of such  options,
will  have an exercise  price per share equal  to the initial public
offering price of the Common Stock and         will have an exercise  price
of  $       per  share. See "Management -- Employment Agreements," "-- 1996
Equity Incentive Plan"  and "-- 1996  Non-Employee Directors' Stock  Option
Plan."

------------------------------

GUESS-Registered   Trademark-,  GUESS?-Registered   Trademark-,  GUESS?  AND
TRIANGLE DESIGN-Registered  Trademark-, BABY  GUESS-TM-, GUESS  KIDS-TM-,  GUESS
WATCHES-Registered  Trademark-,  GUESS  JEANS-TM-,  GUESS  U.S.A.-TM-  and GUESS
COLLECTION-TM- are included among the Company's trademarks.

5

SUMMARY FINANCIAL DATA

FIRST
QUARTER ENDED
YEAR ENDED DECEMBER 31,                 ----------------------
-----------------------------------------------------  APRIL 2,    MARCH 31,
1991       1992       1993       1994       1995       1995        1996
---------  ---------  ---------  ---------  ---------  ---------  -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF EARNINGS DATA:
Net revenue (1)...................................  $ 450,531  $ 512,766  $ 520,224  $ 547,812  $ 486,733  $ 124,903   $ 134,898
Earnings from operations..........................    104,469    109,973    114,464    117,807     82,928     25,476      29,187
Earnings before income taxes......................    102,527    111,224    105,281    101,181     66,814     21,271      25,318
Net earnings......................................     99,832    108,368    103,471     97,641     63,919     20,712      24,047
SUPPLEMENTAL STATEMENT OF EARNINGS DATA (2):
Earnings before income taxes......................    102,527    111,224    105,281    101,181     66,814     21,271      25,318
Income taxes......................................     41,011     44,490     42,112     40,472     26,726      8,508      10,127
---------  ---------  ---------  ---------  ---------  ---------  -----------
Net earnings......................................  $  61,516  $  66,734  $  63,169  $  60,709  $  40,088  $  12,763   $  15,191
---------  ---------  ---------  ---------  ---------  ---------  -----------
---------  ---------  ---------  ---------  ---------  ---------  -----------
Net earnings per share (3)........................                                              $                      $
Weighted average common shares outstanding (3)....

PRO FORMA STATEMENT OF EARNINGS DATA (4):
Earnings from operations..............................................................  $  87,985  $  28,224   $  31,026
Earnings before income taxes..........................................................     72,145     24,302      27,486
Income taxes..........................................................................     28,858      9,721      10,912
---------  ---------  -----------
Net earnings..........................................................................  $  43,287  $  14,581   $  16,574
---------  ---------  -----------
---------  ---------  -----------
Net earnings per share (3)............................................................  $                      $
Weighted average common shares outstanding (3)........................................

AS OF MARCH 31, 1996
----------------------
AS
ADJUSTED
ACTUAL        (5)
---------  -----------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital.......................................................................  $  93,870   $  98,278
Total assets..........................................................................    239,267     246,604
Notes payable and long-term debt......................................................    152,508     145,308
Net stockholders' equity..............................................................     17,470      32,007

- ------------------------------
(1) Includes net revenue from sales (i) to discontinued wholesale accounts  that
the  Company determined  did not meet  its merchandising  standards of $42.3
million, $51.1 million, $32.9 million and $3.8 million for 1992, 1993,  1994
and 1995, respectively, and $2.5 million and $411,000 for the quarters ended
April  2, 1995  and March 31,  1996, respectively, and  (ii) of discontinued
product lines of $82.6 million, $31.7 million, $5.3 million and $1.7 million
for 1992, 1993, 1994 and 1995,  respectively, and $1.1 million and  $339,000
for  the quarters ended April 2, 1995  and March 31, 1996, respectively. See
"Management's Discussion and Analysis of Financial Condition and Results  of
Operations -- General."
(2)  Reflects adjustments for Federal  and state income taxes  as if the Company
had been taxed as a C corporation rather than an S corporation.
(3) Reflects          shares of Common Stock outstanding prior to the  Offerings
and  the assumed issuance of 7,343,955  and 7,637,000 shares of Common Stock
as of December  31, 1995  and March 31,  1996, respectively,  at an  assumed
initial  public offering  price of $22.00  per share  to generate sufficient
cash to pay the S Corporation Distribution (as defined herein) in an  amount
equal to retained earnings.

(4)  Pro  forma operating  results reflect  adjustments to  historical operating
results for  (a)  the  elimination  of salaries  and  bonuses  paid  to  the
Principal  Executive Officers in excess of  an aggregate of $4.9 million per
year, or  $1.2 million  per quarter  (the estimated  aggregate salaries  and
bonuses  to  be  paid  to  the  Principal  Executive  Officers  under  their
respective employment agreements following the Offerings), (b) the  decrease
in  depreciation  and operating  costs (net  of approximate  operating lease
cost) of $2.6 million, $677,000 and $623,000 for the year ended December 31,
1995 and the quarters ended April 2, 1995 and March 31, 1996,  respectively,
associated  with an  aircraft owned by  the Company, which  aircraft will be
distributed to  the Principal  Stockholders  as part  of the  S  Corporation
Distribution  prior to consummation of the Offerings, (c) the elimination of
the minority interest in Guess Italia S.r.l. through the merger of  Marciano
International  (as defined herein)  with and into  the Company in connection
with the Reorganization (as defined  herein), resulting in the inclusion  in
net  earnings of $274,000, $283,000 and $329,000 for the year ended December
31, 1995  and  the  quarters  ended  April  2,  1995  and  March  31,  1996,
respectively,  which  amounts  had  previously  been  recorded  as  minority
interest and (d) adjustments  for Federal and state  income taxes as if  the
Company  had been taxed as a C corporation rather than an S corporation. The
Principal Stockholders  have  informed the  Company  of their  intention  to
dispose  of the aircraft to  be distributed to them.  Pending any such sale,
the Company expects to enter into an  operating lease of the aircraft to  be
distributed  under  which  the  Company  would  remain  responsible  for the
expenses of operating and  maintaining the aircraft  and would make  nominal
lease payments for the use thereof. See "Company History, the Reorganization
and  Prior S Corporation Status"  and "Management -- Employment Agreements."
For additional pro forma statement of earnings data for 1993, 1994 and  1995
and  for  the  quarters  ended  April  2,  1995  and  March  31,  1996,  see
"Management's Discussion and Analysis of Financial Condition and Results  of
Operations -- Results of Operations."

(5) The as adjusted amount includes $180.8 million of S Distribution Notes which
represent the undistributed S corporation taxable earnings at March 31, 1996
that would have been distributed had the Company's S corporation status been
terminated  at such date and reflects the  sale of shares of Common Stock by
the Company hereby at  the assumed initial public  offering price of  $22.00
per  share and  the application of  the estimated net  proceeds therefrom to
repay indebtedness  of  the  Company, including  indebtedness  under  the  S
Distribution  Notes. No adjustment has  been made to give  effect to (i) the
Company's earned and  undistributed taxable S  corporation earnings for  the
period  from  April  1, 1996  through  the  S Termination  Date  (as defined
herein), which will be distributed as part of the S Corporation Distribution
or (ii) for the distribution of an aircraft in lieu of cash as part of the S
Corporation Distribution. Between April 1,  1996 and the S Termination  Date
the  Company anticipates the  amount of undistributed  taxable S corporation
earnings to be between approximately $  million and $   million. See "Use of
Proceeds" and "Company History, the  Reorganization and Prior S  Corporation
Status."

6

RISK FACTORS

PROSPECTIVE  PURCHASERS OF THE  COMMON STOCK OFFERED  HEREBY SHOULD CONSIDER
CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS OTHER INFORMATION SET FORTH IN
THIS  PROSPECTUS,  IN  EVALUATING  AN  INVESTMENT  IN  THE  COMMON  STOCK.  THIS
PROSPECTUS   CONTAINS  FORWARD-LOOKING   STATEMENTS  WHICH   INVOLVE  RISKS  AND
UNCERTAINTIES. THE COMPANY'S  ACTUAL RESULTS  AND THE TIMING  OF CERTAIN  EVENTS
COULD   DIFFER  MATERIALLY  FROM  THOSE   ANTICIPATED  BY  SUCH  FORWARD-LOOKING
STATEMENTS AS  A  RESULT  OF  CERTAIN  FACTORS  DISCUSSED  IN  THIS  PROSPECTUS,
INCLUDING  THE  FACTORS  SET FORTH  BELOW  AND IN  "MANAGEMENT'S  DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION  AND RESULTS OF  OPERATIONS" AND "BUSINESS,"  AS
WELL AS THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS.

COMPETITION AND OTHER FACTORS AFFECTING THE APPAREL AND RETAILING INDUSTRIES

The  apparel  industry  is  highly competitive,  fragmented  and  subject to
rapidly changing consumer demands and preferences. The Company believes that its
success depends in large part upon its ability to anticipate, gauge and  respond
to  changing consumer demands and fashion trends in a timely manner and upon the
continued appeal to  consumers of  the Guess image.  Failure by  the Company  to
identify  and  respond appropriately  to changing  consumer demands  and fashion
trends could adversely affect consumer acceptance of Guess products and may have
a material adverse effect  on the Company's financial  condition and results  of
operations.  Guess competes with numerous apparel manufacturers and distributors
(including Calvin  Klein,  Ralph  Lauren, DKNY,  Tommy  Hilfiger  and  Nautica).
Moreover,  several well-known designers have  recently entered or re-entered the
designer denim market with  products generally priced  lower than the  Company's
designer   jeans  products.  Guess's  retail  and  factory  outlet  stores  face
competition  from  other   retailers.  Additionally,   the  Company   encounters
substantial  competition from department stores, including some of the Company's
major retail customers. Many of the Company's competitors have greater financial
resources than  Guess.  The  Company's licensed  apparel  and  accessories  also
compete  with a substantial number of  designer and non-designer lines. Although
the level and nature of competition  differ among its product categories,  Guess
believes  that it competes primarily on the basis of its brand image, quality of
design and workmanship and product assortment. Increased competition by existing
and future competitors could  result in reductions in  sales or prices of  Guess
products  that could have  a material adverse effect  on the Company's financial
condition  and  results  of  operations.  In  addition,  the  apparel   industry
historically  has  been  subject  to  substantial  cyclical  variations,  and  a
recession in  the general  economy or  uncertainties regarding  future  economic
prospects  that affect  consumer spending habits  could have  a material adverse
effect on the Company's financial condition and results of operations.

DEPENDENCE UPON CERTAIN CUSTOMERS AND LICENSEES

The  Company's  department  store  customers  include  major  United  States
retailers.  The Company's  three largest  customers accounted  for approximately
26.0% of net revenue in 1995. During 1995, Bloomingdale's, Macy's and affiliated
stores owned by Federated Department Stores together accounted for approximately
11.0% of the Company's net revenue; The May Company accounted for  approximately
7.7%   of  the  Company's  net  revenue;  and  Dillard's  stores  accounted  for
approximately 7.3%  of  the  Company's  net revenue.  Although  several  of  the
Company's department store customers are under common ownership, no other single
customer  or group  of related  customers accounted  for more  than 3.0%  of the
Company's net  revenue  in  those  periods.  While  the  Company  believes  that
purchasing  decisions in  many cases are  made independently  by each department
store chain under  common ownership, the  trend may be  toward more  centralized
purchasing  decisions.  A  decision  by  the controlling  owner  of  a  group of
department stores  or any  other  significant customer  to decrease  the  amount
purchased  from the  Company or  to cease carrying  Guess products  could have a
material adverse  effect on  the Company's  financial condition  and results  of
operations.  The retail industry has  periodically experienced consolidation and
other ownership changes. In  the future, the  Company's wholesale customers  may
consolidate,   undergo  restructurings  or  reorganizations,  or  realign  these
affiliations, any of which  could decrease the number  of stores that carry  the
Company's  or its  licensees' products  or increase  the ownership concentration
within the retail industry. Approximately  48.1% of the Company's net  royalties
was  derived from its top  four licensed product lines,  GUESS WATCHES (18.9% of
1995 net royalties),  BABY GUESS (12.3%),  GUESS KIDS (9.2%)  and GUESS  EYEWEAR
(7.7%).  The BABY GUESS and GUESS KIDS lines  are licensed to the same entity. A
substantial portion of sales of GUESS  brand products by its licensees are  also
made  to the Company's three largest customers.  The inability of the Company to
control

7

the quality, focus, image or distribution of its licensed products could  impact
consumer  receptivity  to  the  Company's  products  generally  and,  therefore,
adversely affect the Company's financial condition and results of operations.

RISKS ASSOCIATED WITH ACHIEVING AND MANAGING GROWTH

To manage  growth  effectively,  Guess  will  be  required  to  continue  to
implement  changes in  certain aspects of  its business, continue  to expand its
information systems and operations to  respond to increased demand, attract  and
retain qualified personnel (including management), and develop, train and manage
an  increasing  number  of  management-level  and  other  employees.  Failure to
continue  to  enhance  operating  control  systems  or  unexpected  difficulties
encountered  during  expansion could  adversely  affect the  Company's financial
condition and results of operations.

As part of its operating strategy,  Guess intends to continue to expand  its
network  of retail stores.  Factors beyond the Company's  control may affect the
Company's ability to expand, including general economic and business  conditions
affecting  consumer spending. The  actual number and  type of such  stores to be
opened  and  their  success  will  depend  on  various  factors,  including  the
performance  of the Company's wholesale and retail operations, the acceptance by
consumers of the Company's retail concepts, the ability of the Company to manage
such expansion  and hire  and  train personnel,  the availability  of  desirable
locations  and  the negotiation  of acceptable  lease  terms for  new locations.
Certain of these factors are also beyond the Company's control.

In addition,  Guess's strategy  relies  heavily upon  its ability  to  align
itself  with  effective  distributors and  licensees  that are  able  to deliver
high-quality products consistent with the GUESS brand image in a timely  fashion
and  to successfully integrate  such distributors and  licensees into its global
distribution channels. A general failure by the Company to maintain and  control
its  existing distribution and  licensing arrangements or  to procure additional
distribution and licensing  relationships could adversely  affect the  Company's
growth  strategy, which could adversely affect the Company's financial condition
and results of operations.

The Company's strategic plan for its  wholesale division depends in part  on
its  ability  to  expand its  sales  to international  distributors,  deepen its
product offerings and expand and upgrade its shop-in-shop program. This strategy
is subject to a number of factors beyond the Company's control including general
economic conditions and  changing consumer preferences.  Between 1992 and  1995,
net  revenue from wholesale operations decreased  32%. There can be no assurance
that the Company's business strategy will be successful in halting or  reversing
this decline in net revenue.

DEPENDENCE UPON KEY PERSONNEL

The  success of  Guess is  largely dependent  upon the  personal efforts and
abilities of its senior management, particularly Mr. Maurice Marciano,  Chairman
of the Board and Chief Executive Officer, Mr. Paul Marciano, President and Chief
Operating  Officer, and Mr. Armand Marciano, Senior Executive Vice President and
Secretary. Effective  upon  consummation of  the  Offerings, Maurice,  Paul  and
Armand  Marciano will continue  to beneficially own an  aggregate of    % of the
Company's  outstanding  Common  Stock  and  each  will  enter  into   employment
agreements with the Company. Although the Company has recently recruited several
key  executives with  substantial industry expertise,  the extended  loss of the
services of  one  or more  of  the Principal  Executive  Officers could  have  a
material  adverse  effect  on the  Company's  operations. The  Company  does not
currently have "key man" insurance with respect to any of such individuals.  See
"Management -- Employment Agreements."

FOREIGN OPERATIONS AND SOURCING; IMPORT RESTRICTIONS

During  1995, approximately 21% of the Company's purchases of raw materials,
labor and finished goods for its apparel were made in Hong Kong and other  Asian
countries;  approximately 4%  were made  in Europe;  approximately 1%  were made
elsewhere outside the United  States; and the  balance of 74%  were made in  the
United  States, all through arrangements with independent contractors. In recent
years, Guess has been increasing its  sourcing of fabrics outside of the  United
States.  In addition, Guess has been  increasing its international sales and, in
1995, approximately 5.0% of the Company's net revenue was from product sales  to
customers in international markets. As a result, the Company's operations may be
affected

8

adversely by political instability resulting in the disruption of trade with the
countries  in  which  the  Company's  contractors,  suppliers  or  customers are
located, the  imposition  of additional  regulations  relating to  imports,  the
imposition of additional duties, taxes and other charges on imports, significant
fluctuations   in  the  value  of  the  dollar  against  foreign  currencies  or
restrictions on the  transfer of funds.  The inability of  a contractor to  ship
orders  in a  timely manner could  cause the  Company to miss  the delivery date
requirements  of  its  customers  for   those  items,  which  could  result   in
cancellation  of orders,  refusal to accept  deliveries or a  reduction in sales
prices. Further, since Guess is unable  to return merchandise to its  suppliers,
it  could be faced with a significant  amount of unsold merchandise, which could
have a material adverse effect on the Company's financial condition and  results
of operations.

Sovereignty  over Hong Kong  is scheduled to be  transferred from the United
Kingdom to  The  People's Republic  of  China effective  July  1, 1997.  If  the
business  climate in Hong Kong were to  experience an adverse change as a result
of the  transfer, the  Company believes  it could  relocate its  production  and
sourcing  facilities  outside Hong  Kong and  replace the  merchandise currently
produced in Hong  Kong with  merchandise produced elsewhere  without a  material
adverse  effect on the  Company's financial condition  or results of operations.
Nevertheless, there can be no assurance that the Company would be able to do so.

The Company's  import  operations  are subject  to  constraints  imposed  by
bilateral  textile agreements between the United  States and a number of foreign
countries, including Hong Kong, China, Taiwan and South Korea. These agreements,
which have been negotiated bilaterally either under the framework established by
the  Arrangement  Regarding  International  Trade  in  Textiles,  known  as  the
Multifiber Agreement, or other applicable statutes, impose quotas on the amounts
and types of merchandise which may be imported into the United States from these
countries. These agreements also allow the United States to impose restraints at
any  time  and  on  very  short  notice  on  the  importation  of  categories of
merchandise that, under the terms of  the agreements, are not currently  subject
to specified limits. Imported products are also subject to United States customs
duties  which comprise  a material  portion of  the cost  of the  merchandise. A
substantial increase  in customs  duties could  have an  adverse effect  on  the
Company's  financial condition or  results of operations.  The United States and
the countries in  which the Company's  products are produced  or sold may,  from
time  to  time, impose  new quotas,  duties, tariffs  or other  restrictions, or
adversely adjust prevailing  quota, duty or  tariff levels, any  of which  could
have  a material adverse effect on  the Company's financial condition or results
of operations.

DEPENDENCE ON UNAFFILIATED MANUFACTURERS

The Company does not own or operate any manufacturing facilities other  than
cutting,  silk-screen and embroidery machinery,  and is therefore dependent upon
independent contractors  for  the manufacture  of  its products.  The  Company's
products   are  manufactured  to   its  specifications  by   both  domestic  and
international manufacturers.  The  inability  of  a  manufacturer  to  ship  the
Company's products in a timely manner or to meet the Company's quality standards
could  adversely  affect  the  Company's  ability  to  deliver  products  to its
customers in a timely manner. Delays in delivery could result in missing certain
retailing seasons with respect to some or all of the Company's products or could
otherwise have  an  adverse effect  on  the Company's  financial  condition  and
results  of operations. The  Company does not have  long-term contracts with any
manufacturers.

PROTECTION OF TRADEMARKS

Guess  believes  that  its  trademarks  and  other  proprietary  rights  are
important  to  its  success  and its  competitive  position.  Accordingly, Guess
devotes substantial  resources  to  the  establishment  and  protection  of  its
trademarks  on a worldwide  basis. Nevertheless, there can  be no assurance that
the actions taken  by the Company  to establish and  protect its trademarks  and
other  proprietary rights will be adequate  to prevent imitation of its products
by others or to prevent others from seeking to block sales of Guess products  as
violative  of the trademarks and proprietary  rights of others. No assurance can
be given that others will not assert rights in, or ownership of, trademarks  and
other  proprietary rights  of Guess.  In addition,  the laws  of certain foreign
countries do not protect proprietary rights to the same extent as do the laws of
the United States. See "Business -- Trademarks."

9

FUTURE SALES BY PRINCIPAL STOCKHOLDERS; SHARES ELIGIBLE FOR FUTURE SALE

The Common Stock offered hereby will  be freely tradeable (other than by  an
"affiliate"  of the  Company as such  term is  defined in the  Securities Act of
1933, as amended  (the "Securities  Act")) without  restriction or  registration
under  the Securities Act. Immediately after the Offerings, trusts controlled by
and for the benefit of Maurice  Marciano, Paul Marciano and Armand Marciano  and
their  families, respectively (the  "Principal Stockholders"), will beneficially
own approximately    %,    %  and    %, respectively, of the outstanding  Common
Stock.  Subject to the restrictions set  forth below, the Principal Stockholders
will be  free to  sell  such shares  from  time to  time  to take  advantage  of
favorable  market conditions or for any other  reason. Future sales of shares of
Common Stock by  the Company  and its  stockholders could  adversely affect  the
prevailing   market  price  of  the  Common   Stock.  Guess  and  the  Principal
Stockholders have entered  into lock-up agreements  with Merrill Lynch,  Pierce,
Fenner  &  Smith  Incorporated  ("Merrill  Lynch")  and  Morgan  Stanley  &  Co.
Incorporated,  as   representatives  of   the  U.S.   Underwriters  (the   "U.S.
Representatives"), and with Merrill Lynch International and Morgan Stanley & Co.
International  Limited, as  representatives of  the International  Managers (the
"International Representatives" and, together with the U.S. Representatives, the
"Representatives"), pursuant to which the Company and the Principal Stockholders
have agreed, subject to certain exceptions, not to, directly or indirectly,  (i)
sell,  grant any  option to  purchase or  otherwise transfer  or dispose  of any
Common Stock or securities convertible  into or exchangeable or exercisable  for
Common  Stock or  file a  registration statement  under the  Securities Act with
respect to the  foregoing or  (ii) enter  into any  swap or  other agreement  or
transaction  that transfers,  in whole or  in part, the  economic consequence of
ownership of the  Common Stock,  without the  prior written  consent of  Merrill
Lynch,  for a period of  180 days after the date  of this Prospectus. After such
time, approximately           shares of Common Stock  will be eligible for  sale
pursuant  to Rule  144 promulgated  under the  Securities Act.  In addition, the
Principal  Stockholders  have  rights  to   demand  or  participate  in   future
registrations  of  shares of  Common Stock  under the  Securities Act.  Sales of
substantial amounts of Common Stock in the public market, or the perception that
such sales may occur, could have a  material adverse effect on the market  price
of the Common Stock. See "Shares Eligible for Future Sale" and "Underwriting."

CONTROL BY PRINCIPAL STOCKHOLDERS

Following the consummation of the Offerings, the Principal Stockholders will
have  majority control of the Company and the ability to control the election of
directors and the results of other matters submitted to a vote of  stockholders.
Such  concentration  of ownership,  together with  the anti-takeover  effects of
certain provisions in the Delaware General Corporation Law and in the  Company's
Certificate  of Incorporation  and Bylaws,  may have  the effect  of delaying or
preventing a  change in  control of  the Company.  See "Description  of  Capital
Stock."  The  Board of  Directors of  the  Company is  expected to  be comprised
entirely of  designees  of  the Principal  Stockholders.  See  "Management"  and
"Principal Stockholders."

ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE

Prior  to the  Offerings, there  has been  no public  market for  the Common
Stock, and there can be no assurance that an active trading market will  develop
or  be sustained. The initial public offering  price of the Common Stock offered
hereby will be determined through negotiations among the Company, the  Principal
Stockholders  and the Representatives and may bear no relationship to the market
price for the  Common Stock after  the Offerings. Subsequent  to the  Offerings,
prices  for  the  Common Stock  will  be determined  by  the market  and  may be
influenced by a number of factors,  including depth and liquidity of the  market
for the Common Stock, investor perceptions of the Company, changes in conditions
or  trends  in  the Company's  industry  or  in the  industry  of  the Company's
significant customers, publicly traded comparable companies and general economic
and other conditions. See "Underwriting."

DILUTION

The initial public  offering price  is expected to  be substantially  higher
than  the book value per  share of Common Stock.  Investors purchasing shares of
Common Stock in  the Offerings  will therefore incur  immediate and  substantial
dilution  of $     per share, based  upon the mid-point of  the filing range set
forth on the cover page of this Prospectus. See "Dilution."

10

FORWARD-LOOKING STATEMENTS

When used  in  this Prospectus  and  the documents  incorporated  herein  by
reference,   the   words  "believes,"   "anticipates,"  "expects"   and  similar
expressions are intended to  identify in certain circumstances,  forward-looking
statements.  Such statements are subject to  a number of risks and uncertainties
that could  cause actual  results  to differ  materially from  those  projected,
including  the  risks  described in  this  "Risk Factors"  section.  Given these
uncertainties, prospective investors are cautioned  not to place undue  reliance
on  such statements. The  Company also undertakes no  obligation to update these
forward-looking statements.

11

COMPANY HISTORY, THE REORGANIZATION AND PRIOR S CORPORATION STATUS

Maurice, Paul  and Armand  Marciano, together  with their  brother  Georges,
began  in the apparel business  in France in 1972  and opened their first retail
apparel stores in the United States in 1978 in California. The business of GUESS
was founded in 1981  by the Marciano  brothers. The Company  was founded on  the
concept  of a  fashion jean  with the first  GUESS product  being the "three-zip
Marilyn" jean,  which was  stone-washed and  adapted to  fit the  contours of  a
woman's  body. Since  that time, the  Company's product offerings  have grown to
include full lines of men's and women's casual apparel.

Guess ?, Inc. is a Delaware corporation organized in 1993 to succeed to  the
business  of Guess ?, Inc., a  California corporation ("Guess California"), that
commenced operations  in 1981.  Guess California  was the  entity through  which
Maurice,  Paul, Armand and  Georges Marciano conducted  the Guess business until
August 1993. At that time, Guess California  was merged into Guess ?, Inc.,  and
the  Company and a trust for the benefit of Paul Marciano repurchased the shares
of Common  Stock  owned by  Georges  Marciano, who  simultaneously  resigned  as
Chairman  and  Chief Executive  Officer of  the  Company and  from its  Board of
Directors. Since the inception of  Guess California, Georges Marciano,  together
with  Maurice Marciano, had been primarily responsible for the creation of Guess
California's product.  Georges Marciano  was  primarily responsible  for  design
while  Maurice  Marciano  was  responsible for  product  development.  After the
resignation of Georges  Marciano, Maurice  Marciano became  responsible for  all
aspects  of design along with his  prior responsibilities for the development of
the Company's  strategic focus  and  expansion of  its  business and  was  named
Chairman and Chief Executive Officer. See "Management."

The purchase price for the shares of Common Stock repurchased by the Company
was  approximately $203.5 million.  The Company financed  such purchase with the
proceeds from an offering  of $130.0 million principal  amount of 9 1/2%  Senior
Subordinated  Notes  due 2003  (the "Senior  Subordinated  Notes") and  an $80.0
million short term loan (the "Bridge Loan"). The Bridge Loan was repaid in  full
in  December 1993. As of the date hereof, $105.0 million principal amount of the
Senior Subordinated Notes remains outstanding.

Since 1983, Guess has  elected to be treated  for Federal and certain  state
income  tax purposes  as an  S corporation  under Subchapter  S of  the Internal
Revenue Code of 1986, as amended (the  "Code"), and comparable state laws. As  a
result,  the earnings of the Company  (including its predecessor) for such years
have been  included in  the taxable  income of  the Company's  stockholders  for
Federal and certain state income tax purposes, and the Company has generally not
been  subject to income  tax on such  earnings, other than  California and other
state franchise taxes. Prior to the consummation of the transactions related  to
the  Offerings (the "Closing Date"), the  Company's S corporation status will be
terminated (the "S  Termination Date").  Prior to  the S  Termination Date,  the
Company will declare a distribution to its stockholders that will include all of
its  previously earned  and undistributed S  corporation earnings  through the S
Termination  Date  (the  "S   Corporation  Distribution").  The  S   Corporation
Distribution will occur prior to the S Termination Date and will be comprised of
an  aircraft (with a value of less than  $10.0 million) owned by the Company and
promissory notes bearing interest at 8% per annum (the "S Distribution  Notes").
Guess  estimates that such undistributed  earnings will be between  $    million
and $      million  as of  the Closing  Date, including  a gain  expected to  be
recognized  upon  the  disposition  of  the  Company's  aircraft.  See  "Use  of
Proceeds." On and after the  S Termination Date, the  Company will no longer  be
treated  as an S corporation and, accordingly,  will be fully subject to Federal
and state  income  taxes. See  "Capitalization"  and  note 7  to  the  Company's
consolidated financial statements.

The  Company's current primary  subsidiaries include GEBV  and Guess Italia.
Marciano International, Inc.,  a Delaware  corporation owned by  certain of  the
Principal  Stockholders  ("Marciano  International"),  currently  holds minority
interests  in  GEBV  and  Guess  Italia.  Ranche  is  currently  a  wholly-owned
subsidiary of GEBV.

Prior  to the consummation of the Offerings, (i) Marciano International will
be merged with and  into Guess, (ii)  all of the capital  stock of Guess  Italia
will  be contributed to GEBV, (iii) the Company will effect a     for 1 split of
the Common  Stock and  (iv) the  S Corporation  Distribution will  be  effected,
whereby the

12

Company  will distribute to the Principal  Stockholders an aircraft owned by the
Company and the S  Distribution Notes. All of  such transactions (together  with
the  termination  of the  Company's S  corporation  status described  above) are
referred to herein as the "Reorganization."

The Company's principal executive offices are located at 1444 South  Alameda
Street,  Los  Angeles,  California  90021  and  its  telephone  number  is (213)
765-3100.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common  Stock
offered  by the Company hereby are estimated to be approximately $188.0 million,
based on  an assumed  initial public  offering price  of $22.00  per share.  The
Company intends to immediately use such net proceeds to repay the S Distribution
Notes (estimated to have an aggregate principal amount between $     million and
$        million). The  remaining net proceeds,  if any,  will be  used to repay
outstanding advances  under  the  Company's revolving  credit  facility.  The  S
Distribution  Notes will bear interest  at 8% and will  mature one year from the
Closing Date. Pending repayment  of the S Distribution  Notes, the Company  will
invest  the net  proceeds in short-term,  interest bearing  instruments or other
investment grade  securities. As  of March  31, 1996,  there was  $40.8  million
outstanding  under the revolving credit facility,  which bears interest at 6.9%.
See "Company History,  the Reorganization  and Prior S  Corporation Status"  and
"Management's  Discussion  and Analysis  of Financial  Condition and  Results of
Operations -- Liquidity and Capital Resources."

DIVIDEND POLICY

The  Company  anticipates   that,  after  payment   of  the  S   Corporation
Distribution to the Principal Stockholders in connection with the termination of
the  S corporation status of the Company,  all earnings will be retained for the
foreseeable future for  use in  the operations  of the  business. Purchasers  of
shares  of Common Stock in  the Offerings will not receive  any portion of the S
Corporation  Distribution.  Any  future  determination  as  to  the  payment  of
dividends will be at the discretion of the Company's Board of Directors and will
depend   upon  the   Company's  results  of   operations,  financial  condition,
contractual restrictions  and other  factors  deemed relevant  by the  Board  of
Directors.  The agreement governing the Company's revolving credit facility (the
"Credit Agreement") and the indenture pursuant to which the Senior  Subordinated
Notes  were issued  (the "Indenture") restrict  the payment of  dividends by the
Company. For certain information regarding distributions made by the Company  in
1993,  1994,  1995  and the  quarter  ended  March 31,  1996,  see "Management's
Discussion and  Analysis of  Financial Condition  and Results  of Operations  --
Liquidity and Capital Resources."

13

CAPITALIZATION

The following table sets forth the short-term debt and capitalization of the
Company  as of March 31, 1996 and as adjusted  as of that date to give effect to
(i) the S Corporation Distribution as if the Company's S corporation status  had
terminated  on such date and (ii) an  estimated $7.3 million of net deferred tax
assets that would have been recorded had the Company's S corporation status been
terminated on March 31,  1996, and as  further adjusted to  reflect the sale  of
shares  of Common Stock by  the Company in the  Offerings and the application of
the  estimated  net  proceeds  therefrom  to  repay  indebtedness  under  the  S
Distribution  Notes and  the Credit Agreement.  The information  below should be
read in conjunction with the Company's consolidated financial statements and the
related notes thereto which are included elsewhere in this Prospectus. See  "Use
of Proceeds."

AS OF MARCH 31, 1996
-------------------------------------
AS FURTHER
ACTUAL     AS ADJUSTED   ADJUSTED
-----------  -----------  -----------
(IN THOUSANDS)

Short-term debt:
Current installments of long-term debt.................................  $       978   $     978    $     978
Short-term notes payable...............................................        4,778     185,578(1)      4,778
-----------  -----------  -----------
Total short-term debt................................................  $     5,756   $ 186,556    $   5,756
-----------  -----------  -----------
-----------  -----------  -----------
Long-term debt:
Long-term debt, net of current installments............................  $    41,752   $  41,752    $  34,552
9 1/2% Senior Subordinated Notes due 2003..............................      105,000     105,000      105,000
-----------  -----------  -----------
Total long-term debt.................................................      146,752     146,752      139,552
Stockholders' equity:
Preferred Stock, par value $        per share;         shares
authorized; no shares issued and outstanding..........................      --           --           --
Common Stock, par value $.01 per share;         shares authorized,
shares issued and outstanding actual and as adjusted,
shares issued and outstanding as further adjusted (2).................           35          35          127
Paid-in capital........................................................          181     (12,605)(3)    175,303(3)
Retained earnings (4)..................................................      168,014       7,337        7,337
Foreign currency translation adjustment................................           16          16           16
Treasury stock,          shares repurchased (5)........................     (150,776)   (150,776)    (150,776)
-----------  -----------  -----------
Net stockholders' equity.............................................       17,470    (155,993)      32,007
-----------  -----------  -----------
Total capitalization.................................................  $   164,222   $  (9,241)   $ 171,559
-----------  -----------  -----------
-----------  -----------  -----------

- ------------------------------

(1) The as adjusted amount includes $180.8 million of S Distribution Notes which
represent the undistributed S corporation taxable earnings at March 31, 1996
that would have been distributed had the Company's S corporation status been
terminated on such date.

(2)  Excludes approximately         shares of Common Stock reserved for issuance
pursuant to  awards under  the 1996  Equity Plan  and the  Directors'  Plan,
including  options  to  purchase  shares  of  Common  Stock  to  be  granted
immediately prior to the  Offerings. Of such  options,         will have  an
exercise  price equal to  the initial public offering  price of Common Stock
and       will have an exercise  price of $      per share. See  "Management
--  Employment Agreements,"  "-- 1996  Equity Incentive  Plan" and  "-- 1996
Non-Employee Directors' Stock Option Plan."

(3) Reflects a reduction of $12.8 million of paid-in capital for that portion of
the S Corporation  Distribution which  is in excess  of financial  statement
retained   earnings.  The  S   Corporation  Distribution  exceeds  financial
statement retained earnings because of  differences in the basis of  certain
assets  and  liabilities  between  the financial  reporting  and  income tax
presentation.

(4) No adjustment has been made to  give effect to (i) the Company's earned  and
undistributed  taxable S corporation  earnings for the  period from April 1,
1996 through the S  Termination Date, which will  be distributed as part  of
the  S Corporation Distribution or (ii)  for the distribution of an aircraft
in lieu of cash as part of the S Corporation Distribution. Between April  1,
1996  and  the S  Termination  Date the  Company  anticipates the  amount of
undistributed taxable  S corporation  earnings to  be between  approximately
$   million and $   million. See "Use of Proceeds" and "Company History, the
Reorganization and Prior S Corporation Status."

(5)  Represents the cost in excess of the allocable portion of retained earnings
associated with  the repurchase  of  Common Stock  from a  former  principal
stockholder  of  the  Company.  See note  7  to  the  Company's consolidated
financial statements.

14

DILUTION

The  net  tangible  book  value  of  the  Company  at  March  31,  1996  was
approximately  $     million, or  $     per share of  Common Stock. After giving
effect to the  Reorganization and the  S Corporation Distribution  as if it  had
been  made  as of  March 31,  1996 and  the Company's  S corporation  status had
terminated at such date, the pro forma net tangible book value of the Company at
March 31, 1996  would have been  between approximately $      million to $
million,  or $    to $     per share of Common Stock. After giving effect to the
sale by  the  Company  of shares  of  Common  Stock in  the  Offerings  and  the
application  of the estimated net proceeds therefrom to repay indebtedness under
the S Distribution Notes and the  Company's Credit Agreement, the pro forma  net
tangible book value of the Company as adjusted at March 31, 1996 would have been
approximately  $      million, or  $      per share.  See "Company  History, the
Reorganization and  Prior S  Corporation  Status" and  "Use of  Proceeds."  This
represents an immediate increase in net tangible book value of $    per share to
the  Principal Stockholders and an immediate net tangible book value dilution of
$    per  share to investors purchasing shares  in the Offerings. The  following
table illustrates this per share dilution:

Assumed initial public offering price per share (1)..........             $

Net tangible book value at March 31, 1996................  $

Increase attributable to the establishment of deferred
tax assets..............................................

Decrease attributable to S Corporation Distribution......
---------

Adjusted net tangible book value per share before the
Offerings...............................................

Increase attributable to new investors in the
Offerings...............................................
---------
Net tangible book value, as further adjusted, per share after
the Offerings (2)...........................................
---------
Dilution per share to new investors..........................             $
---------
---------

- ------------------------------

(1)  Before  deducting  estimated  underwriting  discounts  and  commissions and
estimated expenses of the Offerings payable by the Company.

(2) Excludes approximately         shares of Common Stock reserved for  issuance
pursuant  to  awards under  the 1996  Equity Plan  and the  Directors' Plan,
including options to purchase          shares of Common Stock to be  granted
immediately  prior to the  Offerings. Of such  options,         will have an
exercise price per share equal to  the initial public offering price of  the
Common  Stock and       will have an exercise price of $      per share. See
"Management -- Employment Agreements," "--  1996 Equity Incentive Plan"  and
"-- 1996 Non-Employee Directors' Stock Option Plan."

15

SELECTED FINANCIAL DATA

The  selected  financial data  set forth  below have  been derived  from the
consolidated financial statements of the Company and the related notes  thereto.
The  statement of earnings data for the  years ended December 31, 1993, 1994 and
1995 and the balance  sheet data as  of December 31, 1994  and 1995 are  derived
from  the  consolidated financial  statements of  the  Company, which  have been
audited by KPMG Peat Marwick LLP,  independent auditors and which are  contained
elsewhere in this Prospectus. The statement of earnings data for the years ended
December  31, 1991 and 1992 and the balance  sheet data as of December 31, 1991,
1992 and 1993  are derived  from the  consolidated financial  statements of  the
Company, which have been audited but are not contained herein. Financial data as
of  March 31, 1996, and for the quarters ended April 2, 1995 and March 31, 1996,
are unaudited  but,  in the  opinion  of management,  include  all  adjustments,
consisting   only  of  normal  recurring   adjustments,  necessary  for  a  fair
presentation of such data. The results of operations for the quarter ended March
31, 1996 are not necessarily  indicative of the results  to be expected for  the
entire year. The following selected financial data should be read in conjunction
with  the  Company's consolidated  financial  statements and  the  related notes
thereto and "Management's  Discussion and  Analysis of  Financial Condition  and
Results of Operations," which are included elsewhere in this Prospectus.

FIRST
QUARTER
ENDED
YEAR ENDED DECEMBER 31,                    ----------
----------------------------------------------------------   APRIL 2,
1991        1992        1993        1994        1995        1995
----------  ----------  ----------  ----------  ----------  ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF EARNINGS DATA:
Net revenue:
Product sales (1)..............................  $  436,398  $  491,978  $  491,444  $  507,462  $  440,359  $  113,646
Net royalties..................................      14,133      20,788      28,780      40,350      46,374      11,257
----------  ----------  ----------  ----------  ----------  ----------
Total net revenue............................     450,531     512,766     520,224     547,812     486,733     124,903
Cost of sales....................................     226,238     274,920     260,409     291,989     262,142      65,267
----------  ----------  ----------  ----------  ----------  ----------
Gross profit.....................................     224,293     237,846     259,815     255,823     224,591      59,636
Selling, general and administrative expenses.....     119,824     127,873     145,351     138,016     141,663      34,160
----------  ----------  ----------  ----------  ----------  ----------
Earnings from operations.......................     104,469     109,973     114,464     117,807      82,928      25,476
Interest, net....................................       2,108       1,162      11,735      16,948      15,957       4,041
Non-operating (income) expense...................        (166)     (2,413)     (2,552)       (322)        157         164
----------  ----------  ----------  ----------  ----------  ----------
Earnings before income taxes...................     102,527     111,224     105,281     101,181      66,814      21,271
Income taxes.....................................       2,695       2,856       1,810       3,540       2,895         559
----------  ----------  ----------  ----------  ----------  ----------
Net earnings...................................  $   99,832  $  108,368  $  103,471  $   97,641  $   63,919  $   20,712
----------  ----------  ----------  ----------  ----------  ----------
----------  ----------  ----------  ----------  ----------  ----------
SUPPLEMENTAL STATEMENT OF EARNINGS DATA (2):
Earnings before income taxes.....................  $  102,527  $  111,224  $  105,281  $  101,181  $   66,814  $   21,271
Income taxes.....................................      41,011      44,490      42,112      40,472      26,726       8,508
----------  ----------  ----------  ----------  ----------  ----------
Net earnings.....................................  $   61,516  $   66,734  $   63,169  $   60,709  $   40,088  $   12,763
----------  ----------  ----------  ----------  ----------  ----------
----------  ----------  ----------  ----------  ----------  ----------
Net earnings per share (3).......................                                                  $
Weighted average common shares outstanding (3)...

MARCH 31,
1996
-----------

STATEMENT OF EARNINGS DATA:
Net revenue:
Product sales (1)..............................   $ 123,275
Net royalties..................................      11,623
-----------
Total net revenue............................     134,898
Cost of sales....................................      70,479
-----------
Gross profit.....................................      64,419
Selling, general and administrative expenses.....      35,232
-----------
Earnings from operations.......................      29,187
Interest, net....................................       3,549
Non-operating (income) expense...................         320
-----------
Earnings before income taxes...................      25,318
Income taxes.....................................       1,271
-----------
Net earnings...................................   $  24,047
-----------
-----------
SUPPLEMENTAL STATEMENT OF EARNINGS DATA (2):
Earnings before income taxes.....................   $  25,318
Income taxes.....................................      10,127
-----------
Net earnings.....................................   $  15,191
-----------
-----------
Net earnings per share (3).......................   $
Weighted average common shares outstanding (3)...

AS OF
MARCH 31,
1996
AS OF DECEMBER 31,                      ----------
----------------------------------------------------------
1991        1992        1993        1994        1995       ACTUAL
----------  ----------  ----------  ----------  ----------  ----------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital..................................  $   91,635  $  114,732  $   74,094  $   83,127  $   57,572  $   93,870
Total assets.....................................     214,346     226,824     181,017     207,696     202,635     239,267
Notes payable and long-term debt.................      21,461       8,548     189,414     156,495     123,335     152,508
Net stockholders' equity (deficiency)............     149,022     167,390     (50,284)        373      10,997      17,470

AS
ADJUSTED (4)
-----------

BALANCE SHEET DATA:
Working capital..................................   $  98,278
Total assets.....................................     246,604
Notes payable and long-term debt.................     145,308
Net stockholders' equity (deficiency)............      32,007

(FOOTNOTES ON THE FOLLOWING PAGE)

16

(CONTINUED FROM PRIOR PAGE)
- ------------------------

(1)  Includes net revenue from sales (i) to discontinued wholesale accounts that
the Company determined  did not  meet its merchandising  standards of  $42.3
million,  $51.1 million, $32.9 million and $3.8 million for 1992, 1993, 1994
and 1995, respectively, and $2.5 million and $411,000 for the quarters ended
April 2, 1995  and March 31,  1996, respectively, and  (ii) of  discontinued
product lines of $82.6 million, $31.7 million, $5.3 million and $1.7 million
for  1992, 1993, 1994 and 1995,  respectively, and $1.1 million and $339,000
for the quarters ended April 2,  1995 and March 31, 1996, respectively.  See
"Management's  Discussion and Analysis of Financial Condition and Results of
Operations -- General."

(2) Reflects adjustments for  Federal and state income  taxes as if the  Company
had been taxed as a C corporation rather than an S corporation.

(3)  Reflects          shares of Common Stock outstanding prior to the Offerings
and the assumed issuance of 7,343,955  and 7,637,000 shares of Common  Stock
as  of December  31, 1995  and March 31,  1996, respectively,  at an assumed
initial public offering  price of  $22.00 per share  to generate  sufficient
cash  to pay the S  Corporation Distribution in an  amount equal to retained
earnings.

(4) The as adjusted amount includes $180.8 million of S Distribution Notes which
represents the undistributed  S corporation  taxable earnings  at March  31,
1996 that would have been distributed had the Company's S corporation status
been  terminated at  such date,  and reflects the  sale of  shares of Common
Stock by the Company hereby at the assumed initial public offering price  of
$22.00 per share and the application of the estimated net proceeds therefrom
to  repay indebtedness  of the Company,  including indebtedness  under the S
Distribution Notes. No adjustment  has been made to  give effect to (i)  the
Company's  earned and undistributed  taxable S corporation  earnings for the
period from April  1, 1996  through the S  Termination Date,  which will  be
distributed  as  part of  the  S Corporation  Distribution  or (ii)  for the
distribution of an aircraft  in lieu of  cash as part  of the S  Corporation
Distribution.  Between April 1, 1996 and the S Termination Date, the Company
anticipates the amount of undistributed taxable S corporation earnings to be
between approximately $   million and $   million. See "Use of Proceeds" and
"Company History, the Reorganization and Prior S Corporation Status."

17

SELECTED PRO FORMA FINANCIAL DATA

The selected  pro forma  statement  of earnings  data  set forth  below  are
presented  for informational purposes only and may not necessarily be indicative
of the results of operations  of the Company as they  may be in the future.  The
following  selected pro forma financial data  should be read in conjunction with
the Company's consolidated  financial statements and  the related notes  thereto
and  "Management's Discussion and Analysis of Financial Condition and Results of
Operations," which are included elsewhere in this Prospectus.

Amounts reflect pro  forma adjustments to  historical operating results  for
(a)  the  elimination  of  salaries  and bonuses  paid  to  the  three Principal
Executive Officers in excess of an aggregate  of $4.9 million per year, or  $1.2
million  per quarter (the estimated aggregate salaries and bonuses to be paid to
the Principal Executive  Officers under their  respective employment  agreements
following  the Offerings), (b) the decrease  in depreciation and operating costs
(net of approximate operating lease cost) of $2.6 million, $677,000 and $623,000
for the year ended December  31, 1995 and the quarters  ended April 2, 1995  and
March  31, 1996, respectively, associated with an aircraft owned by the Company,
which aircraft will be distributed to the Principal Stockholders as part of  the
S  Corporation  Distribution prior  to consummation  of  the Offerings,  (c) the
elimination of  the minority  interest in  Guess Italia  through the  merger  of
Marciano  International  with  and  into  the  Company  in  connection  with the
Reorganization, resulting in the inclusion in net earnings of $274,000, $283,000
and $329,000 for the year ended December  31, 1995 and the quarters ended  April
2,  1995 and  March 31,  1996, respectively,  which amounts  had previously been
recorded as minority interest and (d)  adjustments for Federal and state  income
taxes  as if  the Company had  been taxed  as a C  corporation rather  than an S
corporation. The  Principal  Stockholders have  informed  the Company  of  their
intention to dispose of the aircraft to be distributed to them. Pending any such
sale, the Company expects to enter into an operating lease of the aircraft to be
distributed under which the Company would remain responsible for the expenses of
operating and maintaining the aircraft and would make nominal lease payments for
the   use  thereof.  See  "Company  History,  the  Reorganization  and  Prior  S
Corporation Status" and  "Management -- Employment  Agreements." For  additional
pro  forma  statement of  earnings  data for  1993, 1994  and  1995 and  for the
quarters ended April 2,  1995 and March 31,  1996, see "Management's  Discussion
and  Analysis of  Financial Condition  and Results  of Operations  -- Results of
Operations."

FIRST QUARTER ENDED
----------------------------
YEAR ENDED        APRIL 2,
DECEMBER 31, 1995      1995      MARCH 31, 1996
-----------------  ------------  --------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)

PRO FORMA STATEMENT OF EARNINGS DATA:
Net revenue:
Product sales.............................................................     $   440,359      $  113,646     $  123,275
Net royalties.............................................................          46,374          11,257         11,623
--------     ------------  --------------
Total net revenue.......................................................         486,733         124,903        134,898
Cost of sales...............................................................         262,142          65,267         70,479
--------     ------------  --------------
Gross profit................................................................         224,591          59,636         64,419
Selling, general and administrative expenses................................         136,606          31,412         33,393
--------     ------------  --------------
Earnings from operations..................................................          87,985          28,224         31,026
Interest, net...............................................................          15,957           4,041          3,549
Non-operating income........................................................             117             119              9
--------     ------------  --------------
Earnings before income taxes..............................................          72,145          24,302         27,486
Income taxes................................................................          28,858           9,721         10,912
--------     ------------  --------------
Net earnings..............................................................     $    43,287      $   14,581     $   16,574
--------     ------------  --------------
--------     ------------  --------------
Net earnings per share (1)..................................................     $                               $
Weighted average common shares outstanding (1)..............................

- ------------------------

(1) Amounts reflect            shares of Common Stock  outstanding prior to  the
Offerings  and the  assumed issuance  of 7,343,955  and 7,637,000  shares of
Common Stock as of December 31, 1995 and March 31, 1996, respectively, at an
assumed initial  public  offering price  of  $22.00 per  share  to  generate
sufficient  cash to pay the S Corporation Distribution in an amount equal to
retained earnings.

18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
"Selected  Financial  Data"  and "Selected  Pro  Forma Financial  Data"  and the
Company's consolidated financial statements and the related notes thereto, which
are included elsewhere in this Prospectus.

GENERAL

The Company derives its revenue and net earnings from the worldwide sale  of
GUESS  brand products  through its  wholesale, retail  and licensing operations.
Since its  inception in  1982, the  Company's net  revenue has  grown to  $486.7
million in 1995. The Company has been profitable in every year of its operations
and  in 1995  generated pro  forma net earnings  (as described  herein) of $43.3
million.

The Company derives its net revenue from the sale of Guess men's and women's
apparel to wholesale  customers and distributors,  the sale of  Guess men's  and
women's  apparel and  its licensees' products  through the  Company's network of
retail and factory outlet  stores and net  royalties from licensing  activities.
The  following  table sets  forth the  net  revenue of  the Company  through its
channels of distribution.

FIRST QUARTER ENDED,
YEAR ENDED DECEMBER 31,                       -------------------------------
----------------------------------------------------------------                        MARCH 31,
1993                  1994                  1995             APRIL 2, 1995        1996
--------------------  --------------------  --------------------  --------------------  ---------
(IN THOUSANDS)

Net revenue:
Wholesale operations...  $ 348,879      67.1%  $ 358,125      65.4%  $ 270,931      55.7%  $  85,344      68.3%  $  83,113
Retail operations......    142,565      27.4     149,337      27.2     169,428      34.8      28,302      22.7      40,162
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net revenue from
product sales.......    491,444      94.5     507,462      92.6     440,359      90.5     113,646      91.0     123,275
Net royalties..........     28,780       5.5      40,350       7.4      46,374       9.5      11,257       9.0      11,623
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Total net revenue....  $ 520,224     100.0%  $ 547,812     100.0%  $ 486,733     100.0%  $ 124,903     100.0%  $ 134,898
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

Net revenue:
Wholesale operations...      61.6%
Retail operations......      29.8
---------
Net revenue from
product sales.......      91.4
Net royalties..........       8.6
---------
Total net revenue....     100.0%
---------
---------

WHOLESALE OPERATIONS

The Company, through its wholesale operations, designs, sources, markets and
distributes its men's and  women's apparel lines to  wholesale customers in  the
United  States and  Italy, to  international distributors  and to  the Company's
network of retail and  factory outlet stores.  Wholesale operations include  the
Company's  U.S.  operations,  Guess  Europe and  Guess  Asia.  Guess  Europe was
established in 1993 to provide a platform for increased international growth and
to better service  the Company's distributors  and international licensees,  and
consists  of a  design studio,  sales office,  sourcing office  and warehouse in
Florence and a showroom in Milan. Guess  Asia, which will become a wholly  owned
subsidiary  of the Company  as part of  the Reorganization, consists  of a sales
office and sourcing office for the Company and a merchandising support operation
for the Company's distributors and licensees. In addition, Guess Europe is a 50%
joint venture partner in a sourcing agency located in Hong Kong.

Since its inception,  net revenue  from the  Company's wholesale  operations
grew  to  $396.9  million in  1992.  Between  1992 and  1995,  net  revenue from
wholesale operations  decreased 32%,  which, to  a large  extent, resulted  from
strategic  business decisions  implemented beginning  in late  1992, including a
renewed focus within its wholesale operations on the sale of its core men's  and
women's  product lines.  As a  result, the  Company converted  the boys' product
line, the majority of the girls'  product line and women's knits into  licensing
arrangements,  which  became effective  at  various times  throughout  1993. Net
revenue attributable  to these  discontinued product  lines was  $82.6  million,
$31.7  million, $5.3  million and  $1.7 million for  1992, 1993,  1994 and 1995,
respectively.  Net  sales  by  such  licensees,  as  reported  to  the  Company,
aggregated  $75.6 million, $109.6  million and $99.5 million  for 1993, 1994 and
1995,  respectively.  See  Note  12  to  the  Company's  consolidated  financial
statements.

Beginning  in late 1993, the Company  made the strategic decision to curtail
distribution of  its  products  to  certain accounts  which  did  not  meet  the
Company's  merchandising  standards  in order  to  protect the  Guess  image and
enhance the exclusivity of  the brand. Net sales  to such discontinued  accounts
represented  approximately $42.3 million, $51.1  million, $32.9 million and $3.8
million of the Company's net revenue in

19

1992, 1993, 1994 and 1995, respectively. In addition, the Company's net  revenue
declined  during this  period as  a result  of increased  competition in branded
denim apparel, the  then sluggish retail  environment, the consolidation  taking
place among department store retailers and financial difficulties experienced by
certain of the Company's wholesale customers.

To address the decline in net revenue from wholesale operations, the Company
is  pursuing a strategy to deepen  the Company's product offerings, increase the
number of shop-in-shops and increase sales to international distributors.  Based
on  positive consumer reaction, the Company  has introduced the GUESS COLLECTION
to selected better department  stores for shipment in  the Fall 1996 season.  In
addition,  the Company intends to broaden its men's and women's lines to include
khaki and other twill products beginning with the 1996 holiday/resort season. In
November 1995 the Company introduced a new line of jeans under the "Bare Basics"
label, with unique  construction and  fabrications and lower  price points  than
traditional  Guess  jeans.  The Company  opened  18 shop-in-shops  in  the first
quarter of 1996. The Company intends to open a total of 75 and 100 shop-in-shops
in 1996 and 1997, respectively, and  intends to support the introduction of  the
GUESS COLLECTION with a unique shop-in-shop program beginning in 1997.

RETAIL OPERATIONS

The  Company's  retail operations  include  112 Company-operated  retail and
factory outlet stores primarily located in regional shopping malls in the United
States, including one Company-operated retail store located in Florence,  Italy.
The  Company's  factory  outlet  stores  serve  as  a  distribution  channel for
discontinued styles,  slow-moving inventory,  returned  goods and  seconds.  The
domestic  retail network includes 64  retail stores located in  20 states and 47
factory outlet  stores  located in  27  states.  The Company's  strategy  is  to
increase  domestic sales by selectively expanding  its network of retail stores,
increasing the comparable store sales of its existing stores and closing  stores
that  do not meet  its financial objectives. Consistent  with this strategy, the
Company has opened two retail stores in  the first quarter of 1996, and  intends
to  open up to five  additional retail stores and  close one retail store during
the remainder of 1996 and to open up to 15 additional retail stores during 1997.

The Company's retail management team recently refined the Company's strategy
to improve the productivity of its retail network by establishing new models for
optimal store size, design and construction costs as well as staffing levels. In
addition, in late 1995,  the Company began to  improve the merchandising mix  in
its  stores and implement sophisticated information systems to improve inventory
control. The  Company  believes that  the  implementation of  these  initiatives
contributed  to the increase  in comparable retail and  factory outlet store net
revenue of 16.7% in the first quarter of 1996.

The Company  monitors the  performance of  each of  its retail  and  factory
outlet  stores  to ensure  they  meet minimum  operating  performance standards.
Stores that  do not  meet these  minimum standards  or are  unprofitable  become
candidates  for closure. Since the beginning of  1993, the Company has closed 16
stores, including  ten  that were  closed  in  1995. During  1995,  the  Company
recorded  provisions for store closing expenses of $2.9 million and $1.0 million
during the third and fourth quarters, respectively.

20

The following chart sets  forth the store openings  and closing since  1993,
total  gross square  footage, comparable store  net revenue and  net revenue per
square foot.

FIRST QUARTER
ENDED
-----------------
YEAR ENDED DECEMBER 31,      APRIL     MARCH
---------------------------     2,        31,
1993      1994      1995      1995      1996
-------   -------   -------   -------   -------

Retail stores
Beginning of period.................       39        36        52       52        62
Opened during period................        1        18        15        1         2
Closed during period................       (4)       (2)       (5)      (2 )    --
-------   -------   -------   -------   -------
End of Period.......................       36        52        62       51        64
-------   -------   -------   -------   -------
-------   -------   -------   -------   -------

Factory stores
Beginning of period.................       22        43        47       47        47
Opened during period................       21         4         5        1      --
Closed during period................    --        --           (5)      (1 )    --
-------   -------   -------   -------   -------
End of Period.......................       43        47        47       47        47
-------   -------   -------   -------   -------
-------   -------   -------   -------   -------

Comparable store sales increase
(decrease).............................     (4.0)%    (5.4)%    (7.4)%   (0.1 )%   16.7 %

Total gross square footage (in
thousands).............................      397       510       636      523       607

Net revenue per gross square foot.......  $ 359.1   $ 292.8   $ 266.4   $ 55.8    $ 67.7

LICENSING OPERATIONS

Guess has selectively  licensed the use  of its trademarks  since 1982.  The
Company's  strategy is to increase net  royalties from selectively licensing the
Guess name to producers of  high-quality products that complement its  lifestyle
collection  in the United States and other territories. In addition to licensing
products which  complement the  Company's apparel  products, Guess  has  granted
licenses  for the manufacture and sale of  GUESS branded products similar to the
Company's, including men's and  women's denim and knitwear,  in markets such  as
Canada,  Argentina,  Mexico, the  Philippines,  South Korea,  Brazil  and Japan.
Licensing both  expands  distribution  into new  territories  and  broadens  the
spectrum  of GUESS brand  products. Licensed products  include watches, clothing
for infants and children, eyewear, footwear, activewear, home products and other
fashion accessories. The Company's royalties, net of direct expenses, from  such
sales  and  nonrecurring fees  increased  from $28.8  million  in 1993  to $46.4
million in 1995. Guess has 26  licensees, all of which are currently  generating
royalties.  Net royalties from the four most significant licensees accounted for
approximately 48.1% and  46.3% of the  Company's net royalties  in 1995 and  the
first quarter of 1996, respectively.

In order to maintain its reputation for quality and style and to control the
integrity  of  the  brand  name,  the  Company's  licensing  department strictly
monitors product  design, development,  merchandising  and marketing  and  meets
regularly  with  licensees  to  ensure consistency  with  the  Company's overall
strategies, and to ensure uniformity and quality control. The Company  regularly
reviews  the  financial reports  provided to  it  by its  licensees in  order to
monitor sales trends,  royalty calculations  and pricing  policies, among  other
things.  All  GUESS  brand  products,  advertising,  promotional  and  packaging
materials must be approved in advance by Guess. The Company operates centers  in
Los  Angeles, Hong Kong and  Milan that assist in  monitoring the quality of the
products and  operations of  its  licensees, as  well  as its  distributors,  in
developing  their territories and  products. These centers  allow the Company to
ensure that all licensees and distributors comply with the strict Guess  quality
standards.

21

PRO FORMA RESULTS OF OPERATIONS

The  following table sets forth pro  forma operating results for the periods
indicated.  Pro  forma  operating  results  reflect  adjustments  to  historical
operating  results for (i) the  elimination of salaries and  bonuses paid to the
Principal Executive Officers in excess of an aggregate of $4.9 million per year,
or $1.2 million per quarter (the estimated aggregate salaries and bonuses to  be
paid  to  the Principal  Executive  Officers under  their  respective employment
agreements following  the  Offerings), (ii)  the  decrease in  depreciation  and
operating  costs  (net of  approximate operating  lease  cost) of  $2.6 million,
$677,000 and $623,000  for the  year ended December  31, 1995  and the  quarters
ended  April  2,  1995 and  March  31,  1996, respectively,  associated  with an
aircraft owned  by  the Company,  which  aircraft  will be  distributed  to  the
Principal  Stockholders  as  part of  the  S Corporation  Distribution  prior to
consummation of the Offerings, (iii) the elimination of the minority interest in
Guess Italia through  the merger  of Marciano  International with  and into  the
Company in connection with the Reorganization, resulting in the inclusion in net
earnings  of $24,000,  $280,000, $274,000, $283,000  and $329,000  for the years
ended December 31, 1993, 1994 and 1995 and the quarters ended April 2, 1995  and
March  31, 1996,  respectively, which  amounts had  previously been  recorded as
minority interest and (iv) adjustments for Federal and state income taxes as  if
the  Company had been taxed as a C corporation rather than an S corporation. The
Principal Stockholders have informed the  Company of their intention to  dispose
of  the aircraft to be  distributed to them. Pending  any such sale, the Company
expects to enter into an operating lease of the aircraft to be distributed under
which the Company  would remain responsible  for the expenses  of operating  and
maintaining  the  aircraft and  would make  nominal lease  payments for  the use
thereof. See  "Company  History,  the Reorganization  and  Prior  S  Corporation
Status"  and  "Management --  Employment Agreements."  For additional  pro forma
statement of earnings data for  1993, 1994 and 1995  and for the quarters  ended
April  2, 1995 and March 31, 1996,  see "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."

FIRST QUARTER ENDED,
YEAR ENDED DECEMBER 31,        ----------------------
----------------------------------   APRIL 2,   MARCH 31,
1993        1994        1995        1995        1996
----------  ----------  ----------  ----------  ----------
(IN THOUSANDS)

Net revenue:
Product sales......................................  $  491,444  $  507,462  $  440,359  $  113,646  $  123,275
Net royalties......................................      28,780      40,350      46,374      11,257      11,623
----------  ----------  ----------  ----------  ----------
Total net revenue..............................     520,224     547,812     486,733     124,903     134,898
Cost of sales........................................     260,409     291,989     262,142      65,267      70,479
----------  ----------  ----------  ----------  ----------
Gross profit.........................................     259,815     255,823     224,591      59,636      64,419
Selling, general and administrative expenses.........     127,971     131,711     136,606      31,412      33,393
----------  ----------  ----------  ----------  ----------
Earnings from operations...........................     131,844     124,112      87,985      28,224      31,026
Interest expense, net................................      11,735      16,948      15,957       4,041       3,549
Non-operating income, net............................      (2,528)        (42)       (117)       (119)         (9)
----------  ----------  ----------  ----------  ----------
Earnings before income taxes.......................     122,637     107,206      72,145      24,302      27,486
Pro forma income taxes...............................      49,055      42,882      28,858       9,721      10,912
----------  ----------  ----------  ----------  ----------
Pro forma net earnings.............................  $   73,582  $   64,324  $   43,287  $   14,581  $   16,574
----------  ----------  ----------  ----------  ----------
----------  ----------  ----------  ----------  ----------

22

The following table sets forth pro  forma operating results as a  percentage
of net revenue for the periods indicated.

FIRST QUARTER ENDED
YEAR ENDED DECEMBER 31,      ------------------------
-------------------------------   APRIL 2,     MARCH 31,
1993       1994       1995        1995         1996
---------  ---------  ---------  -----------  -----------

Net revenue:
Product sales...........................................       94.5%      92.6%      90.5%       91.0%        91.4%
Net royalties...........................................        5.5        7.4        9.5         9.0          8.6
---------  ---------  ---------       -----        -----
Total net revenue...................................      100.0      100.0      100.0       100.0        100.0
Cost of sales.............................................       50.1       53.3       53.9        52.3         52.2
---------  ---------  ---------       -----        -----
Gross profit..............................................       49.9       46.7       46.1        47.7         47.8
Selling, general and administrative expenses..............       24.6       24.0       28.0        25.1         24.8
---------  ---------  ---------       -----        -----
Earnings from operations................................       25.3       22.7       18.1        22.6         23.0
Interest expense, net.....................................        2.3        3.1        3.3         3.2          2.6
Non-operating income, net.................................       (0.5)      (0.0)      (0.0)       (0.1)        (0.0)
---------  ---------  ---------       -----        -----
Earnings before income taxes............................       23.5       19.6       14.8        19.5         20.4
Pro forma income taxes....................................        9.4        7.9        5.9         7.8          8.1
---------  ---------  ---------       -----        -----
Pro forma net earnings..................................       14.1%      11.7%       8.9%       11.7%        12.3%
---------  ---------  ---------       -----        -----
---------  ---------  ---------       -----        -----

FIRST QUARTER ENDED MARCH 31, 1996 COMPARED TO FIRST QUARTER ENDED APRIL 2,
1995

NET  REVENUE.  Net revenue increased $10.0 million or 8.0% to $134.9 million
in the quarter ended  March 31, 1996  from $124.9 million  in the quarter  ended
April  2, 1995. Net revenue from  wholesale operations decreased $2.2 million to
$83.1 million from $85.3 million, due principally to a $10.2 million decline  in
domestic  wholesale  sales (including  a decline  of  $2.1 million  in off-price
revenue, which  represents  net revenue  from  the liquidation  of  discontinued
merchandise  which carries lower  margins), partially offset  by increased sales
outside the United States  of $8.0 million. Net  revenue from retail  operations
increased   $11.9  million  to  $40.2  million  from  $28.3  million,  primarily
attributable to an increase  of 16.7% in comparable  store net revenue and  from
volume generated by two new store openings. The increase in comparable store net
revenue  was primarily attributable to a  more favorable merchandise mix and the
implementation  of  sophisticated  information  systems  to  improve   inventory
control.  Net royalties increased  3.3% in the  quarter ended March  31, 1996 to
$11.6 million from  $11.3 million in  the quarter ended  April 2, 1995.  Revenue
from  international operations  comprised 13.7%  and 7.3%  of the  Company's net
revenue during the first quarters of 1996 and 1995, respectively.

GROSS PROFIT.  Gross profit increased  8.0% to $64.4 million in the  quarter
ended  March 31, 1996 from $59.6 million in the quarter ended April 2, 1995. The
increase in gross profit resulted from increased net royalties and increased net
revenue from product sales.  Gross profit from product  sales increased 9.1%  to
$52.8  million in  the quarter ended  March 31,  1996 from $48.4  million in the
quarter ended  April  2, 1995.  Gross  profit as  a  percentage of  net  revenue
improved  slightly to 47.8% in  the quarter ended March  31, 1996 as compared to
47.7% in the quarter ended April 2, 1995. Excluding royalties, gross profit from
product sales as a percentage  of net revenue increased  to 42.8% from 42.6%  in
the  comparable 1995 period primarily due to  an improvement in the gross profit
margins in both the retail and wholesale operations, partially offset by  growth
in the retail contribution (which generally has a lower gross margin).

SG&A  EXPENSES.    Selling,  general  and  administrative  ("SG&A") expenses
increased 3.1% in the quarter ended March 31, 1996 to $35.2 million, or 26.1% of
net revenue, from $34.2 million, or 27.4%  of net revenue, in the quarter  ended
April  2, 1995. On a pro forma basis, SG&A expenses would have increased 6.3% in
the quarter ended March 31, 1996 to $33.4 million, or 24.8% of net revenue, from
$31.4 million, or 25.2% of net revenue, in the quarter ended April 2, 1995.  The
increase  in SG&A expense  was primarily the result  of increased store expenses
related  to  the  expansion  of  the  retail  operation,  partially  offset   by

23

administrative  cost containment  efforts. The  decrease in  SG&A expenses  as a
percentage of net revenue was the  result of cost containment efforts and  fixed
expenses being spread over a larger revenue base in the 1996 period.

EARNINGS FROM OPERATIONS.  Earnings from operations increased 14.6% to $29.2
million, or 21.6% of net revenue in the quarter ended March 31, 1996, from $25.5
million,  or 20.4% of net revenue, in the  quarter ended April 2, 1995. On a pro
forma basis, earnings from operations would  have increased 9.9% in the  quarter
ended  March 31,  1996 to  $31.0 million,  or 23.0%  of net  revenue, from $28.2
million, or 22.6%  of net  revenue, in  the quarter  ended April  2, 1995.  This
increase  resulted primarily from the increase  in revenue and slightly improved
gross profit margins.

INTEREST EXPENSE, NET.  Net interest expense decreased 12.2% to $3.5 million
in the quarter ended March 31, 1996 from $4.0 million in the quarter ended April
2, 1995.  This decrease  resulted from  lower outstanding  debt. For  the  first
quarter  of 1996, the average  debt balance was $144.8  million, with an average
effective interest rate of 9.3%. For the first quarter of 1995, the average debt
balance was $164.4 million, with an average effective interest rate of 9.3%.

INCOME TAXES.     For Federal  and certain  state income  tax purposes,  the
Company  has  elected  to be  treated  as  an S  corporation  and  therefore has
generally not been subject to income  tax on its earnings. The Company's  income
taxes,  which represent state income taxes  and foreign taxes, were $1.3 million
and $0.6  million in  the  quarters ended  March 31,  1996  and April  2,  1995,
respectively.  The  Company's  S  corporation  status  will  terminate  upon the
consummation of the Offerings and, therefore, the Company will be fully  subject
to  Federal, state and foreign income taxes.  On a pro forma basis, income taxes
would have been $10.9 million and $9.7  million in the quarters ended March  31,
1996 and April 2, 1995.

NET  EARNINGS.  Net earnings  increased 16.1% to $24.0  million, or 17.8% of
net revenue, in the quarter ended March  31, 1996, from $20.7 million, or  16.6%
of  net revenue, in the quarter  ended April 2, 1995. On  a pro forma basis, net
earnings would have increased 13.7% to  $16.6 million, or 12.3% of net  revenue,
in  the  quarter ended  March  31, 1996,  from $14.6  million,  or 11.7%  of net
revenue, in the quarter ended April 2, 1995.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

NET REVENUE.  Net revenue decreased $61.1 million or 11.1% to $486.7 million
in 1995  from $547.8  million in  1994. Net  revenue from  wholesale  operations
decreased $87.2 million to $271.0 million from $358.1 million, including a $22.4
million  decline due to closing certain accounts, and a $2.8 million decline due
to the licensing  out of  certain apparel  lines as  described above.  Excluding
these  items, net revenue  from wholesale operations  would have decreased $61.9
million. The principal reasons for the decrease were a $56.3 million decline  in
domestic sales of men's and women's apparel and a $15.5 million decrease in off-
price  revenue, partially offset by increased sales outside the United States to
international distributors of  $9.8 million.  The Company's  domestic net  sales
declined  during this  period as  a result  of increased  competition in branded
denim apparel, the sluggish retail  environment, the consolidation taking  place
among  department  store  retailers and  financial  difficulties  experienced by
certain of the Company's wholesale customers. Net revenue from retail operations
increased $20.1 million to $169.4 million from $149.3 million. This net increase
reflects a 37.0% increase in retail net revenue resulting from new retail  store
openings,  somewhat offset  by a 7.4%  decline in comparable  store net revenue,
primarily attributable to the continued sluggish market conditions affecting the
factory outlet stores. Net  royalties increased 14.9% in  1995 to $46.4  million
from  $40.4 million  in 1994.  This increase  was attributable  to the continued
growth in  existing  licensees'  businesses  as well  as  the  addition  of  new
licensees.  Revenue from international operations comprised 6.9% and 3.7% of the
Company's net revenue during 1995 and 1994, respectively.

GROSS PROFIT.  Gross profit decreased  12.2% to $224.6 million in 1995  from
$255.8 million in 1994. Gross profit as a percentage of net revenue decreased to
46.1%  in 1995 from 46.7% in 1994. The decrease in gross profit was attributable
to a $67.1 million decrease in net revenue from product sales, partially  offset
by  a $6.0 million  increase in net  royalties. Gross profit  from product sales
decreased 17.3% to $178.2 million in

24

1995 from $215.5 million in  1994. During the second  half of 1995, the  Company
recorded  a provision  of $3.9 million  for anticipated  store closing expenses.
Without this provision, gross margin would  have been 46.9% in 1995 as  compared
with 46.7% in 1994.

SG&A  EXPENSES.  SG&A expenses increased 2.6% to $141.7 million, or 29.1% of
net revenue, in 1995, from $138.0 million, or 25.2% of net revenue, in 1994.  On
a  pro forma basis,  SG&A expenses would  have increased 3.7%  in 1995 to $136.6
million, or 28.0% of net revenue, from $131.7 million, or 24.0% of net  revenue,
in  1994. This increase was  primarily the result of  the continued expansion of
the retail division, an increase in advertising expenses and increased  expenses
relating  to the installation  and remodeling of twice  as many shop-in-shops as
were installed or remodeled  in 1994. These increases  were partially offset  by
reduced  expenses resulting from cost containment  efforts. The increase in SG&A
expenses as a percentage of  net revenue was the  result of the above  mentioned
advertising  and shop-in-shop  expenditures being expensed  as incurred together
with fixed expenses  being spread over  a smaller revenue  base during the  1995
period.

EARNINGS  FROM OPERATIONS.     Earnings from  operations decreased  29.6% to
$82.9 million, or 17.0% of net revenue in 1995, from $117.8 million, or 21.5% of
net revenue, in 1994. On a pro forma basis, earnings from operations would  have
decreased  29.1% in 1995 to $88.0 million,  or 18.1% of net revenue, from $124.1
million, or 22.7% of net revenue, in 1994. This decline primarily resulted  from
a decrease in net revenue, which was partially offset by higher royalty income.

INTEREST EXPENSE, NET.  Net interest expense decreased 5.9% to $16.0 million
for  1995 from $16.9 million in 1994.  This decrease resulted from lower debt in
1995 which more than offset the effect  of higher interest rates. For 1995,  the
average debt balance was $156.6 million, with an average effective interest rate
of  9.5%. For 1994, the average debt balance was $183.2 million, with an average
effective interest rate of 8.6%.

INCOME TAXES.  Income taxes were $2.9  million and $3.5 million in 1995  and
1994,  respectively. On a  pro forma basis,  income taxes would  have been $28.9
million and $42.9 million in 1995 and 1994, respectively.

NET EARNINGS.  Net  earnings decreased 34.5% to  $63.9 million, or 13.1%  of
net revenue, in 1995, from $97.6 million, or 17.8% of net revenue, in 1994. On a
pro  forma basis, net earnings  would have decreased 32.7%  to $43.3 million, or
8.9% of net revenue, in  1995, from $64.3 million, or  11.7% of net revenue,  in
1994.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

NET  REVENUE.  Net revenue increased $27.6 million or 5.3% to $547.8 million
in 1994  from $520.2  million in  1993. Net  revenue from  wholesale  operations
increased  $9.2 million to $358.1 million from $348.9 million, including a $26.3
million decline  due  to  the  licensing of  certain  apparel  lines  previously
produced  by the  Company and  a $18.2  million decline  due to  closing certain
accounts. Excluding these  items, net  revenue from  wholesale operations  would
have  increased $53.7 million. Net revenue from retail operations increased $6.7
million to $149.3 million from $142.6 million. This increase was attributable to
new store openings,  somewhat offset by  a decline  of $5.6 million  or 5.3%  in
comparable  store net revenue. This decline  in comparable store net revenue was
attributable to the  factory outlet stores,  which were affected  by the  severe
East  Coast weather in the early part  of 1994, product assortment changes which
were instituted  in  the  fall  of  1993  and  sluggish  factory  outlet  market
conditions.  Net royalties increased  40.2% in 1994 to  $40.4 million from $28.8
million in 1993. This increase was attributable to royalties from new  licensees
including  the aforementioned  boys, girls, and  women's knit lines,  as well as
increased royalties from higher net revenue by existing licensees. Revenue  from
international  operations comprised 3.7%  and 2.7% of  the Company's net revenue
during 1994 and 1993, respectively.

GROSS PROFIT.  Gross  profit decreased 1.5% to  $255.8 million in 1994  from
$259.8 million in 1993. Gross profit as a percentage of net revenue decreased to
46.7%  in 1994 from 49.9% in 1993. The decrease in gross profit was attributable
to a $15.6 million decrease in gross profit from product sales, partially offset
by an $11.6 million increase in  net royalties. Gross profit from product  sales
decreased  6.7% to  $215.5 million  in 1994  from $231.0  million in  1993. This
decrease reflects an increase in production costs due to changes in  fabrication
and  processing costs,  as well  as higher  occupancy costs  as a  percentage of
revenue due to the opening of new retail stores.

25

SG&A EXPENSES.  SG&A expenses decreased 5.1% to $138.0 million, or 25.2%  of
net  revenue, in 1994, from $145.4 million, or 27.9% of net revenue, in 1993. On
a pro forma basis,  SG&A expenses would  have increased 2.9%  in 1994 to  $131.7
million,  or 24.0% of net revenue, from $128.0 million, or 24.6% of net revenue,
in 1993. This  increase was primarily  attributable to the  opening of a  design
studio  in  Florence,  Italy and  an  increase  in domestic  design  and selling
expenses related to the additions of new stores.

EARNINGS FROM OPERATIONS.  Earnings from operations increased 2.9% to $117.8
million, or 21.5% of net revenue in  1994, from $114.5 million, or 22.0% of  net
revenue,  in 1993.  On a  pro forma basis,  earnings from  operations would have
decreased 5.9% in 1994 to $124.1 million,  or 22.7% of net revenue, from  $131.8
million, or 25.3% of net revenue, in 1993.

NON-OPERATING  INCOME.    Non-operating  income was  $0.3  million  for 1994
compared to $2.6 million in 1993. The non-operating income in 1993 was primarily
a result of a lawsuit settlement.

INTEREST EXPENSE, NET.  Net interest expense increased to $16.9 million  for
1994  from $11.7  million in  1993. This  increase resulted  from the  full year
effect  of  financing   transactions  entered  into   in  connection  with   the
recapitalization  of the Company  in August 1993, including  the issuance of the
Senior Subordinated Notes and borrowing  under a revolving credit facility.  For
1994,  the average  debt balance was  $183.2 million, with  an average effective
interest rate of  8.6%. For 1993,  the average debt  balance was $90.5  million,
with an average effective interest rate of 8.9%.

INCOME  TAXES.  Income taxes were $3.5  million and $1.8 million in 1994 and
1993, respectively. On  a pro forma  basis, income taxes  would have been  $42.9
million and $49.1 million in 1994 and 1993, respectively.

NET EARNINGS.  Net earnings decreased 5.6% to $97.6 million, or 17.8% of net
revenue,  in  1994,  from $103.5  million  or  19.9% of  net  revenue,  in 1993,
primarily due to the  increase in interest  expense. On a  pro forma basis,  net
earnings  would have decreased 12.6% to $64.3  million, or 11.7% of net revenue,
in 1994, from $73.6 million, or 14.1% of net revenue, in 1993.

LIQUIDITY AND CAPITAL RESOURCES

The Company  has relied  primarily upon  internally generated  funds,  trade
credit  and bank  borrowings to finance  its operations, expansion,  and to make
periodic distributions to its  stockholders. As of March  31, 1996, the  Company
had  working capital of $93.9 million, compared to $57.6 million at December 31,
1995. The $36.3 million  increase in working capital  primarily resulted from  a
$17.6   million  increase  in  inventories  and  a  $18.8  million  increase  in
receivables. The  increase  in inventory  and  receivables relates  to  seasonal
requirements and the buildup of initial inventories of the Company's BARE BASICS
line.

As  part of  the Company's  management of  its working  capital, the Company
performs all customer credit functions internally, including extension of credit
and collections. The Company's  bad debt write-offs were  less than 0.5% of  net
revenue for the quarter ended March 31, 1996 and year ended December 31, 1995.

The  Company's  Credit Agreement  provides  for a  $100.0  million revolving
credit facility which includes a $20.0  million sublimit for letters of  credit.
As  of March 31, 1996,  the Company had $40.8  million in outstanding borrowings
under the revolving credit  facility and outstanding letters  of credit of  $9.0
million.  As of  March 31,  1996, the  Company had  $50.2 million  available for
future borrowings under such facility. The revolving credit facility will expire
in December 1997. In addition  to the revolving credit,  the Company also has  a
$25.0  million letter of credit facility. As  of March 31, 1996, the Company had
$10.5 million outstanding under this facility.

Capital expenditures, net of lease incentives granted, totaled $21.7 million
for 1995 and  $18.3 million  for 1994. The  Company estimates  that its  capital
expenditures  for 1996  will be approximately  $20.0 million,  primarily for the
expansion of its retail stores and operations.

As a result of the Company's treatment  as an S corporation for Federal  and
certain  state income  tax purposes, the  Company has provided  to the Principal
Stockholders periodic distributions for the payment of income taxes, as well  as
a  return on their investment. The Company paid dividends, including amounts for
taxes, of $117.7  million, $47.0  million, $53.3  million and  $17.6 million  in
1993, 1994, 1995 and the first

26

quarter  ended  March  31,  1996, respectively.  Prior  to  consummation  of the
Offerings,  the  Company  will  declare  the  S  Corporation  Distribution   and
distribute  the S Distribution Notes, which notes  will mature one year from the
Closing Date of the Offerings. Prior  to the consummation of the Offerings,  the
Company's S corporation status will be terminated. The Company anticipates that,
after  payment of  the S  Corporation Distribution  (including repayment  of the
remaining balance of the  S Distribution Notes), any  earnings will be  retained
through  1997  in the  operations  of the  business.  See "Company  History, the
Reorganization and Prior S Corporation Status" and "Dividend Policy."

Subsequent to the  consummation of  the Offerings, the  Company's cash  flow
needs  will  decrease as  a result  of decreased  compensation to  the Principal
Executive Officers and the absence of stockholder distributions for the purposes
of tax payments.  Offsetting these decreases  will be increases  related to  the
need to apply funds to the payment of Federal and additional state income taxes.
The  net effect on cash  for such changes is  expected to increase the Company's
cash flow.

The Company anticipates  that it will  be able to  satisfy its ongoing  cash
requirements  for  the foreseeable  future,  including retail  and international
expansion plans  and  interest payments  on  the Company's  Senior  Subordinated
Notes,  primarily with cash flow from operations, supplemented, if necessary, by
borrowings under its Credit Agreement.

SEASONALITY

The Company's business is impacted by  the general seasonal trends that  are
characteristic  of the  apparel and  retail industries.  The Company's wholesale
operations generally  experience stronger  performance in  the first  and  third
quarters, while retail operations are generally stronger in the third and fourth
quarters.  As the timing of the shipment of products may vary from year to year,
the results for any particular quarter may not be indicative of results for  the
full  year.  The  Company  has  not had  significant  overhead  and  other costs
generally associated with large seasonal variations.

The following  table sets  forth certain  unaudited quarterly  data for  the
periods shown.

1994                                        1995                       1996
------------------------------------------  ------------------------------------------  ---------
FIRST     SECOND      THIRD     FOURTH      FIRST     SECOND      THIRD     FOURTH      FIRST
QTR.       QTR.       QTR.       QTR.       QTR.       QTR.       QTR.       QTR.       QTR.
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
(IN THOUSANDS)

Net revenue........  $ 122,729  $ 119,383  $ 160,783  $ 144,917  $ 124,903  $ 104,749  $ 133,129  $ 123,952  $ 134,898
Gross profit.......     59,784     53,611     79,232     63,196     59,638     49,207     59,148     56,598     64,419

INFLATION

The Company does not believe that the relatively moderate rates of inflation
experienced  in  the  United  States  over  the  last  three  years  have  had a
significant effect on its net revenue or profitability. Although higher rates of
inflation have been experienced  in a number of  foreign countries in which  the
Company's products are manufactured, the Company does not believe that they have
had a material effect on the Company's net revenue or profitability.

EXCHANGE RATES

The  Company receives  United States  dollars for  substantially all  of its
product sales  and its  licensing revenues.  Inventory purchases  from  offshore
contract  manufacturers  are  primarily denominated  in  United  States dollars;
however,  purchase  prices  for  the  Company's  products  may  be  impacted  by
fluctuations in the exchange rate between the United States dollar and the local
currencies  of  the  contract  manufacturers,  which  may  have  the  effect  of
increasing the Company's cost of goods in the future. During the last two fiscal
years, exchange  rate  fluctuations  have  not had  a  material  impact  on  the
Company's  inventory costs.  The Company  currently does  not engage  in hedging
activities with respect to such exchange rate risk. See "Risk Factors -- Foreign
Operations."

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting  Standards Board (the  "FASB") issued Statement  of
Financial  Accounting Standards  No. 121 ("SFAS  No. 121"),  "Accounting for the
Impairment of Long-Lived Assets and for Long-

27

Lived Assets to be  disposed of," in  March 1995 which  is effective for  fiscal
years  beginning after  December 15, 1995.  SFAS No.  121 establishes accounting
standards  for  the  impairment  of  long-lived  assets,  certain   identifiable
intangibles  and  goodwill  related  to these  assets  and  certain identifiable
intangibles to be disposed of. Since the Company's current policy is  consistent
with  the  provisions of  SFAS  No. 121,  it does  not  anticipate that  the new
pronouncement will impact its financial statements.

In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123,  "Accounting  for  Stock-Based Compensation"  ("SFAS  123").  SFAS  123
established  a  fair  value-based  method of  accounting  for  compensation cost
related to  stock options  and other  forms of  stock-based compensation  plans.
However,  SFAS 123  allows an entity  to continue to  measure compensation costs
using the principles of Accounting Principles Board pronouncement 25 if  certain
pro forma disclosures are made. SFAS 123 is effective for fiscal years beginning
after  December 15, 1995.  The Company intends  to adopt the  provisions for pro
forma disclosure requirements of  SFAS 123 in fiscal  1996 and anticipates  that
SFAS  123 will  not have a  material impact  on its financial  statements. As of
March 31,  1996,  the  Company  had  not  issued  any  stock  options  or  other
instruments under which SFAS 123 would apply.

28

BUSINESS

INTRODUCTION

Guess,   founded  in  1981  by  the  Marciano  brothers,  designs,  markets,
distributes and licenses  one of  the world's leading  lifestyle collections  of
casual apparel, accessories and related consumer products. The Company's apparel
for  men and  women is  inspired by  an appreciation  of the  American lifestyle
combined with a European flair and is marketed under the trademarks GUESS, GUESS
U.S.A., GUESS? AND TRIANGLE DESIGN and GUESS COLLECTION. The lines include  full
collections  of  denim and  cotton clothing,  including jeans,  pants, overalls,
skirts, dresses, shorts, blouses, shirts, jackets and knitwear. In addition, the
Company has granted  licenses to  manufacture and  distribute a  broad range  of
products  that  complement  the  Company's  apparel  lines,  including  watches,
clothing for infants and children, eyewear, footwear, activewear, home  products
and  other  fashion accessories.  The  Company's product  quality  combined with
captivating advertising  images  have  created a  global  brand  franchise  with
products  that appeal  to style-conscious consumers  across a  broad spectrum of
ages. The Company  generates revenue  from wholesale and  retail operations  and
licensing  activities, which accounted for 56%, 35% and 9%, respectively, of net
revenue in 1995. The Company's total net revenue in 1995 was $486.7 million  and
pro forma net earnings (as described herein) were $43.3 million.

The  Company  achieves  premium  pricing  for  its  products  by emphasizing
superior styling and quality.  The Company maintains  rigorous control over  the
quality of its products by performing its own design and development work and by
closely  monitoring  the  workmanship  of  its  contractors  and  licensees. The
enduring strength  of  the GUESS  brand  name and  image  is reinforced  by  the
Company's  consistent emphasis on  innovative and distinctive  design. Under the
direction of  Maurice Marciano,  the Company's  design department  creates  full
lines  of casual  apparel that appeal  to both  men and women.  During 1995, net
sales of apparel for men and for women accounted for approximately 48% and  52%,
respectively,  of net  revenue from  the sale of  apparel products.  Each of the
lines consists of a broad array of basic, recurring styles, complemented by more
fashion-oriented items which reflect contemporary trends. During 1995, net sales
of  basic  and  fashion   items  accounted  for   approximately  49%  and   51%,
respectively, of the Company's net revenue from the sale of apparel products.

The  Company seeks to reach a  broad consumer base through multiple channels
of distribution. As of March 31,  1996 GUESS brand products were distributed  by
the  Company, its licensees and  international distributors to better department
stores and upscale  specialty stores,  112 stores  operated by  the Company  (of
which  65 were retail stores  and 47 were factory  outlet stores) and 205 stores
operated  by  licensees  and  distributors.   As  a  critical  element  of   its
distribution  to  department  stores,  the  Company  and  its  licensees utilize
shop-in-shops to enhance brand  recognition, permit more complete  merchandising
of  the  lines  and differentiate  the  presentation  of GUESS  products.  As of
December 31,  1995  the Company's  and  its  licensees' products  were  sold  in
approximately 1,600 shop-in-shops worldwide. In order to protect the Guess image
and  enhance the exclusivity of the brand, the Company began in 1993 to withdraw
its products from certain  wholesale accounts which did  not meet the  Company's
merchandising   standards.  Sales  to  such  discontinued  accounts  represented
approximately $51.1 million, $32.9 million and $3.8 million of the Company's net
revenue in  1993, 1994  and 1995,  respectively. The  Company's own  network  of
stores,  in  addition to  providing  a key  opportunity  for growth,  allows the
Company to present and merchandise its entire collection and to test market  new
product concepts.

The  Company intends to capitalize on the worldwide recognition of its brand
name and the breadth of Guess lifestyle products by expanding its  international
operations.  The Company has established Guess Europe in Italy and Guess Asia in
Hong Kong to design, source and market  products in Europe and the Pacific  Rim.
Guess  has  granted  licenses for  the  manufacture  and sale  of  GUESS branded
products similar  to  the  Company's,  including men's  and  women's  denim  and
knitwear,  in markets such as Canada,  Argentina, Mexico, the Philippines, South
Korea, Brazil  and  Japan.  Although  Guess  is  in  the  early  stages  of  its
international  expansion, GUESS  brand products  are currently  sold in  over 70
countries primarily through licensees and distributors.

The desirability of  the GUESS brand  name among consumers  has allowed  the
Company   to  selectively   expand  its  product   offerings  through  licensing
arrangements. The Company believes its licensing strategy

29

significantly broadens the distribution of  GUESS brand products while  limiting
the  Company's capital investment and  operating expenses. The Company carefully
selects its licensees,  maintains strict control  over the design,  advertising,
marketing  and distribution of all licensed  products and requires all licensees
to make significant investments in advertising, promotion and marketing in order
to maintain a consistent  global GUESS brand image.  The Company's 26  licensees
manufacture  and distribute  a broad array  of related consumer  products in the
United States and international markets. The Company's most significant licenses
include GUESS WATCHES, BABY GUESS, GUESS KIDS and GUESS EYEWEAR, which  together
accounted  for approximately 48.1%  of the Company's net  royalties in 1995. The
Company continues to capitalize on the GUESS brand image by granting licenses to
introduce related  products.  Recently,  the Company  licensed  the  GUESS  HOME
COLLECTION and GUESS OUTERWEAR, as well as various accessory products.

Under  Paul  Marciano's  direction  and  supervision,  Guess  has  created a
consistent, high profile  image through  the use  of its  distinctive black  and
white print ads. The Company's in-house Advertising Department directs the media
placement of all advertising worldwide, including placement by its licensees and
distributors.  On numerous occasions  since 1986, the  Company's advertising has
garnered prestigious  awards,  including CLIO,  BELDING  and MOBIUS  awards.  By
retaining control over its advertising programs, the Company is able to maintain
the  integrity  of the  GUESS  brand image  while  realizing a  substantial cost
savings compared to  the use of  outside agencies. From  1992 through 1995,  the
Company's advertising expenditures, together with amounts spent by its licensees
and  its  distributors  (as  reported  to  the  Company  by  such  licensees and
distributors), exceeded $160.0 million.

BUSINESS STRATEGY

The  Company's  business  strategy  is   designed  to  increase  sales   and
profitability while preserving the integrity and expanding the product depth and
global  reach of  the GUESS brand.  Over the  past three years,  the Company has
built the infrastructure necessary to support distribution and licensing of  its
products  worldwide. To provide  greater management depth,  Company has recently
recruited  several  key  executives  with  substantial  industry  experience  to
facilitate  the implementation  of its  business strategy,  including Ken Duane,
Andrea Weiss and Michael Wallen. The key elements of the strategy include:

MAINTAIN HIGH BRAND RECOGNITION.   The Company  intends to continue  its
efforts  to increase its  revenues by enhancing  consumer recognition of its
brand name and image.  Under the creative leadership  of Paul Marciano,  the
Company's  award-winning  advertising  has established  the  Guess signature
image and  reinforced  the lifestyle  concept  of Guess  and  Guess-licensed
products  in  mutually supportive  marketing campaigns.  In addition  to the
Company's expenditures,  licensees are  required to  spend a  percentage  of
total revenues in advertising. The aggregate advertising expenditures of the
Company  and its distributors  and licensees (as reported  to the Company by
such licensees  and  distributors)  were  $50.7 million  in  1995,  a  16.2%
increase over 1994.

INCREASE   INTERNATIONAL  PRESENCE.     The   Company  believes   it  is
well-positioned to capitalize on the worldwide recognition of its brand name
and the breadth  of Guess  lifestyle products  by continuing  to expand  its
distribution internationally through distributors and licensees. The Company
has  recently established Guess Europe in Italy  and Guess Asia in Hong Kong
to design, source and market products  in Europe and the Pacific Rim,  which
will  facilitate  increased  sales  to  existing  and  new  distributors and
licensees outside the United States. As of March 31, 1996, 164 Guess  retail
stores  were  operated internationally,  112 of  which  were operated  by 13
licensees and 52 of which were  operated by eight distributors. The  Company
has  been  advised  by its  distributors  and  licensees that  they  plan to
establish approximately 35 new distributor-operated stores and approximately
21  licensee-operated  stores,  respectively,  by  the  end  of  1996,   and
approximately   an  additional   45  new   distributor-operated  stores  and
approximately 39 licensee-operated stores, respectively, by the end of 1997.

EXPAND LICENSING  ARRANGEMENTS.   The  Company  expects to  continue  to
license  the GUESS  name selectively to  producers of  high quality products
that complement its lifestyle collection.  Since the beginning of 1993,  the
Company  has added new licenses, which in 1995 represented approximately 30%
of the Company's  net royalties.  Recently, the Company  licensed the  GUESS
HOME  COLLECTION and GUESS OUTERWEAR, as well as various accessory products.
To maintain its reputation for quality and style and

30

control the  integrity of  the  brand name,  the  Company will  continue  to
provide  design, production  and technical  and marketing  assistance to its
licensees to  ensure  compliance  with  its  strict  marketing  and  product
standards.

EXPAND  RETAIL STORE NETWORK.   The Company  believes an expanded retail
network will reinforce consumer  recognition of its  brand name and  enhance
the  presentation of the  complete Guess merchandise  collections. Since the
beginning of  1993, the  Company has  opened a  total of  25 retail  and  25
factory outlet stores (net of store closings). The percentage of net revenue
generated  by the retail  network has increased  from 19.3% to  38.5% of the
Company's net revenue from product sales from 1992 through 1995. The Company
plans to open six new retail stores  (net of store closings) in 1996 and  up
to an additional 15 stores in 1997.

DEEPEN  PRODUCT  OFFERINGS.   The  Company has  recently  introduced new
product lines and categories to complement its existing lines. In 1993,  the
Company  introduced in its retail stores  the GUESS COLLECTION and has since
expanded this collection  to a full  line of higher  priced women's  apparel
that  incorporates a sophisticated combination of styles and colors. In 1995
and  the  first  quarter  of  1996,  the  GUESS  COLLECTION  accounted   for
approximately  11.4%  and  14.6%,  respectively,  of  net  revenue  from the
Company's stores.  Based  on positive  consumer  reaction, the  Company  has
introduced  the GUESS  COLLECTION to  selected better  department stores for
shipment in  the Fall  1996  season. In  addition,  the Company  intends  to
broaden  its  men's  and women's  lines  to  include khaki  and  other twill
products beginning with the 1996 holiday/resort season. In November 1995 the
Company introduced a new line of  jeans under the "Bare Basics" label,  with
unique construction and fabrications and lower price points than traditional
Guess jeans.

IMPROVE  PRODUCTIVITY OF THE RETAIL STORE NETWORK.  The Company's retail
management team has recently refined  the Company's strategy to improve  the
productivity  of its retail  network by establishing  new models for optimal
store size, design  and construction costs  as well as  staffing levels.  In
addition,  in late 1995, the Company  began to improve the merchandising mix
in its stores and implemented  sophisticated information systems to  improve
inventory  management. The Company believes that the implementation of these
initiatives contributed to  the increase  in comparable  factory outlet  and
retail store net revenue of 16.7% in the first quarter of 1996.

EXPAND  AND UPGRADE  SHOP-IN-SHOP PROGRAM.   To enhance  the presence of
Guess  products  in  department  stores,  the  Company  intends  to  develop
approximately  80 new  shop-in-shops in  1996 and  100 in  1997, and remodel
approximately 45 additional shops in 1996 and 55 in 1997. The design of  the
shops   utilizes  the   distinctive  Guess  advertising   to  promote  brand
recognition and differentiate the location  from its competition. The  shops
also  facilitate ease of  shopping by presenting  a complete presentation of
the Company's  merchandise. In  addition, the  installation of  these  shops
enables  the Company  to establish  premium locations  within the department
stores and, therefore, compete more effectively against other products.

31

GENERAL

The Company derives its net revenue from the sale of Guess men's and women's
apparel to wholesale customers and distributors and the sale of Guess men's  and
women's  apparel and  its licensees' products  through the  Company's network of
retail and factory outlet stores. The following table sets forth the net revenue
of the Company through its channels of distribution.

FIRST QUARTER ENDED,
YEAR ENDED DECEMBER 31,                       -------------------------------
----------------------------------------------------------------                        MARCH 31,
1993                  1994                  1995             APRIL 2, 1995        1996
--------------------  --------------------  --------------------  --------------------  ---------
(IN THOUSANDS)

Net Revenue:
Wholesale
operations...........  $ 348,879       67.1% $ 358,125       65.4% $ 270,931       55.7% $  85,344       68.3% $  83,113
Retail operations.....    142,565       27.4    149,337       27.2    169,428       34.8     28,302       22.7     40,162
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Net revenue from
product sales........    491,444       94.5    507,462       92.6    440,359       90.5    113,646       91.0    123,275
Net royalties.........     28,780        5.5     40,350        7.4     46,374        9.5     11,257        9.0     11,623
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
Total net revenue...  $ 520,224      100.0% $ 547,812      100.0% $ 486,733      100.0% $ 124,903      100.0% $ 134,898
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------

Net Revenue:
Wholesale
operations...........       61.6%
Retail operations.....       29.8
---------
Net revenue from
product sales........       91.4
Net royalties.........        8.6
---------
Total net revenue...      100.0%
---------
---------

The following table sets forth the Company's net revenue from product  sales
generated  through such channels  of distribution by  product category (licensed
products represent  sales  of licensed  products  by the  Company's  retail  and
factory outlet stores).

YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1993                     1994                     1995
-----------------------  -----------------------  -----------------------
PRODUCT
- ----------------------------------------

Men's apparel...........................  $  239,767       48.8%   $  250,687       49.4%   $  194,945       44.3%
Women's apparel.........................     199,405       40.6       225,268       44.4       210,945       47.9
Licensed products.......................      11,854        2.4        21,274        4.2        31,881        7.2
Discontinued apparel (1)................      40,418        8.2        10,233        2.0         2,588        0.6
----------      -----    ----------      -----    ----------      -----
Total (2).............................  $  491,444      100.0%   $  507,462      100.0%   $  440,359      100.0%
----------      -----    ----------      -----    ----------      -----
----------      -----    ----------      -----    ----------      -----

- ------------------------------

(1)  In late 1992, the  Company entered into licensing  agreements for the boys'
product line, the  majority of the  girls' product line  and women's  knits,
which  were previously produced by the  Company. While the licensing of such
products reduced net revenue in  1993, the associated reduction in  earnings
from  operations from such sales was substantially offset by the increase in
net royalties from the new licenses.

(2) Beginning in 1993, the Company began to withdraw its products from  selected
accounts  which did not meet the  Company's standards for merchandising. Net
product sales  to  discontinued  accounts  represented  approximately  $51.1
million,  $32.9 million and  $3.8 million of the  Company's net revenue from
product sales in 1993, 1994 and 1995, respectively.

PRODUCTS

COMPANY PRODUCTS.  The GUESS brand was founded upon its core product line of
high-quality jeans and other denim casual  wear. Guess has been marketing  denim
apparel since its inception in 1981, and has built and maintained a global brand
franchise  with products that appeal to style-conscious consumers across a broad
spectrum of ages. The Company was founded on the concept of a fashion jean  with
the   first  Guess  product  being  the  "three-zip  Marilyn"  jean,  which  was
stone-washed and  adapted to  fit the  contours  of a  woman's body.  Since  its
inception,  the Company has  expanded its products  to include a  broad range of
denim and cotton clothing for men  and women, including jeans, pants,  overalls,
skirts, dresses, shorts, blouses, shirts, jackets and knitwear.

32

The  Company's apparel products  are organized into  two primary categories:
men's  apparel  and  women's  apparel  (including  the  GUESS  COLLECTION).  The
following  table sets forth  the approximate range of  current retail prices for
the Company's products:

RANGE OF
SUGGESTED
RETAIL PRICES
----------------------                                                   RANGE OF
WOMEN'S                                                          MEN'S                                       SUGGESTED
- -----------------------------------                              ------------------------------------      RETAIL PRICES
----------------------

Jeans..............................  $   58    -    $    64      Jeans...............................  $   58    -    $    72
Shorts.............................      39    -         52      Shorts..............................      39    -         56
Tops...............................      38    -         76      Woven Tops..........................      40    -         78
Dresses............................      72    -         82      Jackets.............................      88    -        162
Pants..............................      60    -         68      T-Shirts............................      22    -         88
Jackets............................      78    -         80
Guess Collection...................      66    -        340

A major portion of the Company's men's and women's apparel lines consists of
basic, recurring  styles which  the  Company believes  are less  susceptible  to
fashion  obsolescence  and  are less  seasonal  in nature  than  fashion product
styles. Basic product styles  provide the Company with  a base of business  that
usually  carries over from season to season and year to year. Basic products are
primarily made of denim and include jeans, skirts, dresses, overalls and  shorts
in  a variety  of fits,  washes and  styles. To  take advantage  of contemporary
trends, the  Company complements  its basic  styles with  more  fashion-oriented
items.  Fashion products range  in style from  contemporary sportswear to casual
apparel and include colored  denim items, pants,  shirts, jackets and  knitwear,
made  of  a variety  of  materials including  fine  cotton, man-made  fabric and
leather. A limited number of best-selling  fashion items in a collection may  be
included in one or more subsequent collections, and a select few may be added to
the Company's basic styles.

In  1993, the Company  expanded its line  of women's apparel  to include the
GUESS COLLECTION, a  collection of  women's skirts, tops,  jackets, blazers  and
blouses  incorporating  a sophisticated  combination of  colors and  styles. The
GUESS COLLECTION was introduced exclusively through Guess stores and, based upon
positive consumer  reaction,  the Company  expanded  distribution of  the  GUESS
COLLECTION  to selected better  department stores for shipment  in the 1996 Fall
season. The GUESS COLLECTION appeals to the contemporary segment of the  apparel
market  and will generally  be sold in  separate selling areas  from other Guess
denim and casual apparel.

LICENSED PRODUCTS.  The high level  of desirability of the GUESS brand  name
among  consumers  has  allowed the  Company  to selectively  expand  its product
offerings  through  licensing  arrangements.   The  Company  currently  has   26
licensees.  Sales  of  licensed products  (as  reported  to the  Company  by its
licensees) have grown from $451.7 million in 1993 to $736.5 million in 1995. The
Company's net royalties from  such sales and fees  from new licensees  increased
from  $28.8 million in 1993 to $46.4 million in 1995. Approximately 48.1% of the
Company's net royalties was  derived from its top  four licensed product  lines.
These  product lines are GUESS WATCHES (18.9% of 1995 net royalties), BABY GUESS
(12.3%), GUESS KIDS (9.2%) and GUESS EYEWEAR (7.7%).

GUESS WATCHES have been manufactured  and distributed since 1983. The  GUESS
WATCH  line  includes approximately  408 styles  of watches  for men,  women and
children, and clocks.  Retail prices range  from approximately $55  to $125.  In
1996, an upscale, higher-priced line of watches is planned to be introduced at a
retail price range of $175 to $250.

The  BABY GUESS  and GUESS  KIDS product  lines include  infants', boys' and
girls' clothing, accessories, infant layette items and baby hair care  products.
These   products  retail  for  $4.50  to   $70  and  are  sold  domestically  in
free-standing licensed stores, better department stores and through distributors
in Asia.

GUESS EYEWEAR is  manufactured and distributed  worldwide. The eyewear  line
offers  styles ranging in retail  price from $37 to  $200. Guess eyewear is sold
through optical specialty and department stores.

33

Guess also  licenses a  range of  other products,  including men's  apparel,
women's  knitwear, footwear, activewear,  athleticwear, leather goods, neckwear,
jewelry and a home  collection. Most of these  licenses have been granted  since
1993 and are in their early stage of development.

DESIGN

The  enduring strength of the GUESS brand name and image is partially due to
the Company's consistent emphasis on innovative and distinctive design. For  the
past  15 years, the Guess design teams  have anticipated and adapted to changing
consumer tastes while retaining the distinctive Guess image. Under the direction
of Maurice Marciano, Guess  garments are designed by  an in-house staff of  four
design  teams (men's, women's, GUESS COLLECTION and Guess Europe) located in Los
Angeles and Florence, Italy. Guess design teams travel around the world in order
to monitor fashion trends and discover  new fabrics. Fabric shows in Europe  and
the  United States provide  additional opportunities to  discover and sample new
fabrics. These  fabrics, together  with the  trends uncovered  by the  Company's
designers serve as the primary source of inspiration for the Company's lines and
collections.  The Company also maintains a fashion library consisting of antique
and contemporary  garments as  an  additional source  of creative  concepts.  In
addition,  design teams regularly meet with  members of the sales, merchandising
and retail operations to further refine the Company's products in order to  meet
the particular needs of the Company's markets. Many Guess products are developed
using computer-aided design equipment which allows a designer to view and modify
two-  and three-dimensional  images of  a new  design. By  the end  of 1996, the
Company  intends  to  link   its  Los  Angeles   and  Florence  design   centers
electronically  so that individual designs may  be accessed, modified and shared
by designers in  both locations. After  working prototypes of  each garment  are
prepared  and reviewed, the pattern makers  oversee the final production of each
garment's pattern.  As  of  March  31, 1996,  the  Company's  design  department
employed  130 persons,  approximately 27  of whom  were designers  and assistant
designers.

Licensed products are  designed by  both the  Company and  its licensees.  A
separate design team of 12 associates works with the Company's licensees and all
licensee  designs must be approved by the Company to ensure consistency with the
Guess image. See "-- Licensing Agreements and Terms."

DOMESTIC WHOLESALE CUSTOMERS

The Company's  domestic  wholesale  customers consist  primarily  of  better
department  stores and select upscale specialty stores, which have the image and
merchandising expertise that  Guess requires for  the effective presentation  of
its  products. Leading wholesale customers  include Federated Department Stores,
The May Department Stores  Company, Dillard Department  Stores, Inc. and  select
upscale specialty stores. As of December 31, 1995, the Company sold its products
directly   to  approximately  2,700  retail  doors  in  the  United  States  and
approximately 350 doors in Italy.

A key element of  the Company's merchandising  strategy is the  shop-in-shop
merchandising  format, an exclusive selling area  within a department store that
presents a full array of Guess products using Guess signage and fixtures. As  of
December  31,  1995,  there were  approximately  1,160  shop-in-shops (excluding
shop-in-shops installed by  licensees) that feature  Guess products (other  than
the  GUESS  COLLECTION)  and  the  Company intends  to  increase  the  number of
shop-in-shops by  approximately 80  by  the end  of  1996 and  approximately  an
additional  100  by the  end  of 1997.  Guess  also intends  to  establish GUESS
COLLECTION shop-in-shops,  in addition  to existing  shop-in-shops, in  selected
better department stores beginning in the Spring of 1997.

The  Company's  close wholesale  customer  relationships have  been achieved
through innovative  and  effective  marketing  and  merchandising  and  superior
customer service. As of March 31, 1996, the Company had 77 sales representatives
and  81 merchandise coordinators.  The sales representatives  are located in the
Company's showrooms in  New York,  Los Angeles, Dallas,  Atlanta, Chicago,  Hong
Kong,  Milan  and  Florence.  They  coordinate  with  buyers  for  the Company's
customers to  determine the  inventory  level and  product  mix that  should  be
carried in each store to maximize retail sell-through and enhance the customers'
profit  margins. Such inventory level and product mix are then used as the basis
for developing sales projections and product needs for each wholesale  customer.
In  addition, Guess sales representatives  monitor the inventories of customers,
which assists the Company in scheduling production. The merchandisers work  with
the store to ensure the Company's products are appropriately displayed.

34

Certain  of the Company's domestic wholesale customers, including some under
common ownership, have accounted for  significant portions of the Company's  net
revenue.  During  1995, Bloomingdale's,  Macy's and  affiliated stores  owned by
Federated Department Stores  together accounted for  approximately 11.0% of  the
Company's  net revenue.  During the same  period, The May  Company and Dillard's
accounted for  approximately  7.7%  and  7.3%  of  the  Company's  net  revenue,
respectively.   See  "Risk  Factors  --  Dependence  on  Certain  Customers  and
Licensees."

DOMESTIC RETAIL OPERATIONS

As of March 31, 1996, the Company's domestic retail operations consisted  of
64  retail and 47 factory outlet stores operated directly by Guess in the United
States, which principally sell GUESS label products. Guess retail stores outside
the United States, with  the exception of the  Company-owned store in  Florence,
Italy,  are owned and operated by  the Company's distributors and licensees. See
"-- International Business." Since the beginning of 1993, the Company has opened
a total of 25 retail and 25 factory  outlet stores and has closed 11 retail  and
five  factory  outlet stores.  The percentage  of net  revenue generated  by the
retail network has increased  from 19.3% to 38.5%  of the Company's net  revenue
from product sales from 1992 through 1995.

The  Company's  retail management  team has  recently refined  the Company's
strategy to improve the productivity of  its retail network by establishing  new
models for optimal store size, design and construction costs as well as staffing
levels.   In  addition,  in  late  1995,   the  Company  began  to  improve  the
merchandising mix  in  its  stores  and  implemented  sophisticated  information
systems   to  improve  inventory  management.  The  Company  believes  that  the
implementation of these  initiatives contributed to  the increase in  comparable
retail  and factory outlet  store net revenue  of 16.7% in  the first quarter of
1996.

RETAIL STORES.  The Company's 64  domestic retail stores typically range  in
size  from  approximately  3,400 to  8,500  square  feet, with  61  locations in
regional shopping  malls and  three stand-alone  stores in  areas of  high  foot
traffic.  The retail stores are located in 20 states with approximately an equal
number of stores on both the East and  West Coasts. Of the retail stores on  the
West  Coast, 22 are located  in California. The Company's  retail stores carry a
full assortment of men's  and women's Guess merchandise,  including most of  its
licensed products. Distribution through its own retail stores allows the Company
to  influence the  merchandising and  presentation of  its products  and to test
market new product concepts. The Company's strategy is to increase its  domestic
sales  by selectively expanding  its network of retail  stores and by increasing
the productivity  of  its  existing  stores.  Over  the  past  year,  Guess  has
significantly   strengthened  its  retail   operations  management  through  the
selective hiring of experienced well-respected retail professionals.

As of March 31, 1996, the Company had opened two retail stores in 1996.  The
Company intends to open up to five additional retail stores and close one retail
store during the remainder of 1996 and to open up to 15 additional retail stores
during  1997. The Company intends  to continue to locate  its stores in regional
malls with a smaller number of flagship stores in major cities.

FACTORY OUTLET STORES.   The  Company's 47 factory  outlet stores  typically
range  in size from approximately 2,100 to  7,500 square feet and are located in
outlet malls and  strip centers  outside the  shopping radius  of the  Company's
wholesale customers and its retail stores. The factory outlet stores are located
in  27 states, with no  major concentration in any  one state. These stores sell
selected styles  of  Guess  apparel  and licensed  products  at  a  discount  to
value-conscious  customers,  enabling  the Company  to  effectively  control the
distribution of its excess  inventory, thereby protecting  the Guess image.  The
Company  plans  to open  one and  close one  factory outlet  store in  1996. The
Company has no plans to open additional factory outlet stores in 1996 or 1997.

INTERNATIONAL BUSINESS

Given the  high level  of GUESS  brand awareness  in countries  outside  the
United  States, the  Company believes  that international  distribution of GUESS
brand products  represents a  significant opportunity  to increase  revenue  and
profits.  This awareness is partially a  result of the substantial international
advertising undertaken by  the Company  in advance of  distributing products  to
these  locations. Although  Guess is  in the  early stages  of its international
expansion, GUESS brand products are currently sold in over 70 countries.

35

Guess derives net revenue and earnings  from outside the United States  from
four  principal sources: (i) sales of GUESS brand apparel directly to 12 foreign
distributors who distribute  such apparel to  better department stores,  upscale
specialty  retail  stores and  Guess-licensed  retail stores  operated  by Guess
distributors or licensees,  (ii) royalties  from licensees  who manufacture  and
distribute  GUESS brand products outside the United States, (iii) royalties from
licensees who have been granted licenses to own and operate Guess retail  stores
outside  the United States and (iv) sales of GUESS brand apparel by Guess Europe
directly to upscale retail stores in Italy.

Since 1991, the Company has  been selling its products through  distributors
and  licensees in  Asia, the  Middle East  and Australia.  In 1993,  the Company
opened a design studio, sourcing office, sales office and warehouse in Italy and
in 1994 began sourcing,  marketing and distributing  products directly in  Italy
and  executed a  distribution agreement for  Spain. Recently,  Guess has entered
into distribution agreements for the  United Kingdom, Austria, Belgium,  Greece,
Hungary,  Israel and  Turkey, and  is in  the process  of negotiating additional
arrangements in Europe.

As of March 31, 1996, 164 Guess retail stores were operated internationally,
112 of which  were operated by  13 licensees and  52 of which  were operated  by
eight  distributors. The Company's distribution and license agreements generally
provide detailed  guidelines for  store  fittings, fixtures,  merchandising  and
marketing  programs and the  appearance, merchandising and  service standards of
these stores are closely monitored to ensure the Guess image is maintained.  The
Company  has been advised  by its distributors  and licensees that  they plan to
establish approximately 35 new distributor-operated stores and approximately  21
licensee-operated stores, respectively, by the end of 1996, and approximately an
additional   45   new   distributor-operated   stores   and   approximately   39
licensee-operated stores, respectively, by the end of 1997. Guess also owns  and
operates  a  flagship  Guess retail  store  located  in Florence,  Italy.  As of
December 31, 1995, there  were approximately 220  shop-in-shops for GUESS  brand
products  in  stores outside  the United  States. See  "Risk Factors  -- Foreign
Operations and Sourcing -- Import Restrictions."

LICENSING AGREEMENTS AND TERMS

The  Company  carefully  selects  and  maintains  tight  control  over   its
licensees.  In  evaluating  a  potential  licensee,  the  Company  considers the
experience, financial stability, manufacturing performance and marketing ability
of the proposed licensee  and evaluates the  marketability and compatibility  of
the  proposed products with other GUESS brand merchandise. The Company's license
agreements generally  cover  three  years  with an  option  to  renew  prior  to
expiration  for  an  additional  multi-year  period.  In  addition  to licensing
products which  complement the  Company's apparel  products, Guess  has  granted
licenses  for the manufacture and sale of  GUESS branded products similar to the
Company's, including men's and  women's denim and knitwear,  in markets such  as
Canada,  Argentina,  Mexico, the  Philippines,  South Korea,  Brazil  and Japan.
Licenses granted to certain licensees which have produced high-quality  products
and otherwise have demonstrated exceptional operating performance, such as GUESS
WATCHES and BABY GUESS, have been renewed repeatedly (in some cases for up to 20
years)  and  in some  cases expanded  to  include new  products or  markets. The
typical license agreement requires that the licensee pay the Company the greater
of a royalty  based on  a percentage  of the  licensee's net  sales of  licensed
products  or a guaranteed minimum royalty that typically increases over the term
of  the  license  agreement.  Generally,  licensees  are  required  to  spend  a
percentage  of the net sales of  licensed products for advertising and promotion
of the licensed products. In addition, certain foreign licensees are required to
contribute  toward  the  protection  of  the  Company's  trademarks  within  the
territories granted to such licensees, thereby assisting Guess in its efforts to
prevent counterfeiting and other trademark infringement in such countries.

The   Company's  licensing  department  strictly  monitors  product  design,
development, merchandising and marketing. All GUESS brand products, advertising,
promotional and packaging materials  must be approved in  advance by Guess.  The
licensing  department meets regularly with  licensees to ensure consistency with
Guess's overall marketing,  merchandising and design  strategies, and to  ensure
uniformity  and quality  control. See "Risk  Factors --  Dependence upon Certain
Customers and Licensees."

36

ADVERTISING, PUBLIC RELATIONS AND MARKETING

The Company's advertising,  public relations  and marketing  strategy is  to
promote  a consistent  high impact  image which  endures regardless  of changing
consumer trends. Since the Company's inception, Paul Marciano has had  principal
responsibility  for the  GUESS brand  image and  creative vision.  All worldwide
advertising  and  promotional  material  is  controlled  through  the  Company's
Advertising  Department based in  Los Angeles, while  Guess Public Relations and
Special Events are based in New York.  GUESS JEANS, GUESS U.S.A. and GUESS  INC.
images  have been showcased in international  print campaigns in dozens of major
magazines, on billboards, bus shelters  and telephone kiosks, on television  and
most recently in movie theaters throughout the United States.

ADVERTISING.   The Company's advertising strategy is designed to promote the
Guess image rather than  focus on specific  products. The Company's  distinctive
black and white print advertisements have garnered prestigious awards, including
CLIO,  BELDING and MOBIUS awards. Such awards, which the Company has received on
numerous occasions  since  1986, are  generally  awarded  on the  basis  of  the
judgment  of prominent members of the advertising industry. Guess has maintained
a high degree  of consistency in  its advertisements, using  similar themes  and
images. From 1992 through 1995, the Company's advertising expenditures, together
with  amounts spent by  its licensees and  its distributors (as  reported to the
Company by such licensees and distributors), exceeded $160.0 million.

The Company's  in-house  Advertising  Department is  responsible  for  media
placement  of all  advertising worldwide  including that  of its  licensees. The
Company uses a  variety of media,  primarily black and  white print and  outdoor
advertising   in  various  countries.  The  Company  has  focused  advertisement
placement  in  national  and   international  contemporary  fashion/beauty   and
lifestyle magazines including VOGUE, GLAMOUR, VANITY FAIR, HARPERS BAZAAR, ELLE,
W  and DETAILS. By retaining control  over its advertising programs, the Company
is able  to maintain  the integrity  of the  GUESS brand  image while  realizing
substantial  cost savings compared to the use of outside agencies. The Company's
Advertising Department consisted of 12 employees as of March 31, 1996.

PUBLIC RELATIONS.  The Company's Public Relations Department is  responsible
for  communicating the Guess image  to the public and  news media worldwide. The
Public Relations Department also coordinates local publicity and special  events
programs  for the Company and its  licensees, including in-store Guess model and
celebrity appearances and fashion shows.  The Guess Public Relations  Department
consisted of seven full time employees as of March 31, 1996.

MARKETING.   The Company utilizes various additional marketing tools such as
corporate mailers, videos,  newsletters, special  events and a  toll free  Guess
number  to assist  customers worldwide  in finding  Guess retail  locations. The
Company also  produces  200,000 copies  of  the  GUESS JOURNAL,  a  full  color,
oversized  semi-annual magazine available in  retail stores worldwide or through
the Guess mailing list.  The GUESS JOURNAL features  trends in the arts,  travel
destinations,  candid celebrity profiles, philanthropic events and Guess product
information.

The Company further  strengthens communications with  customers through  the
WORLD  OF GUESS, the Company's Internet site  on the World Wide Web. This global
medium enables  the Company  to provide  timely information  in an  entertaining
fashion  on  the  Company's  history,  Guess  products  and  store  locations to
consumers and allows  the Company to  receive and respond  directly to  customer
feedback.

SOURCING AND PRODUCT DEVELOPMENT

The  Company sources products through numerous  suppliers, many of whom have
established relationships with  the Company.  The Company seeks  to achieve  the
most  efficient means for the  timely delivery of its  high quality products and
continues to rebalance its sourcing by  region in response to increasing  demand
within  each region. The Company's fabric  specialists work with fabric mills in
the United States,  Europe and Asia  to develop woven  and knitted fabrics  that
enhance  the products' comfort, design and appearance. For a substantial portion
of the Company's apparel products, fabric purchases take place generally four to
five

37

months prior  to  the corresponding  selling  season. Apparel  production  (cut,
manufacture  and trim) generally begins after  the Company has received customer
orders. Delivery of finished goods to  customers occurs approximately 90 to  120
days after receipt of customers' orders.

The Company engages both domestic and foreign contractors for the production
of its products. During 1995, the Company purchased approximately 74% of its raw
materials,  labor and  finished goods  in the United  States, 21%  in Hong Kong,
Taiwan, South Korea and other Asian  countries, 4% in Europe, and 1%  elsewhere.
The  production and sourcing staffs in Los Angeles and Italy oversee all aspects
of fabric acquisition, apparel manufacturing, quality control and production, as
well as researching and developing new  sources of supply. The Company  operates
product  sourcing  and quality  control offices  in Los  Angeles, Hong  Kong and
Florence.

The Company  does  not own  any  production equipment  other  than  cutting,
silkscreen and embroidery machinery. The Company's apparel products are produced
for  the  Company  by  approximately  80  different  contractors.  None  of  the
contractors engaged by the Company accounted for more than 10% of the  Company's
total  production during 1995. The Company has long-term relationships with many
of its contractors, although it does not have written agreements with them.  The
Company  uses a variety of raw materials, principally consisting of woven denim,
woven cotton and knitted  fabrics and yarns. The  Company must make  commitments
for  a significant  portion of  its fabric purchases  well in  advance of sales,
although the Company's risk is reduced because 50% of the Company's products are
sewn in  basic denim.  See "Risk  Factors --  Foreign Operations  and  Sourcing;
Import Restrictions," and "-- Dependence on Unaffiliated Manufacturers."

QUALITY CONTROL

The  Company's quality control program is designed to ensure that all of the
Company's products  meet  the  Company's high  quality  standards.  The  Company
monitors  the quality  of its  fabrics prior to  the production  of garments and
inspects prototypes of each  product before production  runs are commenced.  The
Company  also performs  random in-line quality  control checks  during and after
production before the  garments leave the  contractor. Final random  inspections
occur  when the garments are received in the Company's distribution centers. The
Company currently has 25 full-time personnel engaged in quality control  located
in  its Los Angeles  office, five located in  Hong Kong (who  work for the joint
venture) and  four  in  Florence, including  two  independent  contractors.  The
Company  believes that its policy of inspecting its products at its distribution
centers and  at the  contractors'  facilities is  important in  maintaining  the
quality and reputation of its products. The Company also conducts inspections on
all licensed products.

The  Company  permits defective  garments to  be  authorized for  return for
credit by the purchasers. Less than 0.6% of the garments shipped by the  Company
during each of the last three years has been returned under this policy.

WAREHOUSE AND DISTRIBUTION CENTERS

The  Company utilizes  distribution centers  at three  strategically located
sites. Two of the distribution  centers are operated by  the Company and one  is
operated by an independent contractor. Distribution of the Company's products in
the  United States is  centralized in the  Los Angeles facility  operated by the
Company. The Company also operates a distribution center in Florence to  service
Europe. The Company utilizes a contract warehouse in Hong Kong that services the
Pacific Rim.

The  Company  currently intends  to open  a  contract warehouse  in Northern
Europe for distribution  to portions  of Europe  outside of  Italy. The  Company
anticipates that such warehouse will become operational during the first half of
1997.

In order to ensure that each of its retail customers receives merchandise in
satisfactory condition, substantially all Company products are processed through
one  of  the  Company's  distribution  centers  before  delivery  to  the retail
customer. Each  customer  is  assigned  to one  of  the  Company's  distribution
centers, depending on the customer's location.

38

At  its distribution center in Los Angeles, the Company has also developed a
fully integrated and  automated distribution  system. The bar  code scanning  of
merchandise,  picking  tickets  and distribution  cartons,  together  with radio
frequency communications, provide timely, controlled, accurate and instantaneous
updates to the distribution information systems.

COMPETITION

The apparel industry is highly competitive and fragmented, and is subject to
rapidly changing consumer demands and preferences. The Company believes that its
success depends in large part upon its ability to anticipate, gauge and  respond
to  changing consumer demands and fashion trends in a timely manner and upon the
continued appeal to consumers of the  Guess image. Guess competes with  numerous
apparel  manufacturers and  distributors (including Calvin  Klein, Ralph Lauren,
DKNY, Tommy Hilfiger and Nautica).  Moreover, several well-known designers  have
recently entered or re-entered the designer denim market with products generally
priced  lower than the  Company's designer jeans  products. The Company's retail
and factory outlet stores face  competition from other retailers.  Additionally,
the Company encounters substantial competition from department stores, including
some of the Company's major retail customers. The Company's licensed apparel and
accessories  also compete with a substantial number of designer and non-designer
lines. Many of the Company's  competitors have greater financial resources  than
Guess.   The  Company's  licensed  products  also  compete  with  various  other
well-known consumer brands. Although the level and nature of competition  differ
among  its product categories, Guess  believes that it competes  on the basis of
its brand image, quality of design and workmanship and product assortment.

TRADEMARKS

As of March 31, 1996, the Company had more than 1,500 U.S. and international
trademarks, including GUESS?,  GUESS, GUESS?  AND TRIANGLE  DESIGN, BABY  GUESS,
GUESS  KIDS,  GUESS  U.S.A.  and  GUESS  COLLECTION,  registered  or  which have
applications pending with the  trademark offices of the  United States and  over
137  countries  around the  world. From  time  to time,  the Company  adopts new
trademarks in connection with  the marketing of new  product lines. The  Company
considers  its  trademarks to  have significant  value in  the marketing  of its
products  and,  since   shortly  after  the   Company's  inception,  has   acted
aggressively to register and protect its trademarks worldwide.

Like  many  well-known  brands,  the  Company's  trademarks  are  subject to
infringement. Guess  has  a  staff  devoted to  the  monitoring  and  aggressive
protection  of  its  trademarks  worldwide,  which  uses,  among  other  things,
available legal remedies to prevent unauthorized use of its trademarks.

MANAGEMENT INFORMATION SYSTEMS

The Company believes  that advanced information  processing is essential  to
maintaining  its competitive position.  Consequently, over the  past three years
(ending December  31, 1995),  the Company  has invested  over $20.0  million  in
upgrading  its  management  information  systems.  The  Company  is implementing
systems which allow  areas of  the business to  be more  pro-active to  customer
requirements,  to  improve  internal  communication  flow,  to  increase process
efficiency, and to support management decisions.

The Company's  systems  provide,  among other  things,  comprehensive  order
processing, production, accounting and management information for the marketing,
selling,  manufacturing, retailing  and distribution functions  of the Company's
business. The  Company  has  developed a  sophisticated  software  program  that
enables  the  Company  to  track,  among  other  things,  orders,  manufacturing
schedules, inventory  and  sales  of  Guess products.  The  program  includes  a
centralized  management information system which  provides the various operating
departments with integrated financial, sales, inventory and distribution related
information.

Computer-aided-design (CAD) systems are utilized within both the design  and
marking  and grading departments to develop  fabrics and styles. The Company has
these systems in place both domestically and internationally, allowing for  this
information  to be shared. All  style and fabric information  is maintained in a
line management system which streamlines communication between the design, sales
and production departments.

39

The Company  is a  Quick Response  (QR) vendor  which, via  electronic  data
interchange  (EDI), provides  for customer  orders to be  shipped from  24 to 72
hours from the time of order receipt. The Company currently receives EDI  orders
on  a  worldwide basis,  including its  Singapore  and London  distributors. The
Company's integrated  and  automated  distribution system,  utilizing  bar  code
scanning  of merchandise, pick tickets and shipping cartons, together with radio
frequency  communications,  provide  controlled,  accurate,  and   instantaneous
updates to the distribution information system.

The  retail systems allow for rapid stock replenishment, concise merchandise
planning, and  inventory  accounting  and control  practices.  The  Company  has
installed  sophisticated  point-of-sale registers  in  Guess retail  and factory
outlet stores and is in  the process of installing  a computer network for  such
stores  that will enable  the Company to  track inventory from  store receipt to
final sales.

WHOLESALE BACKLOG

The Company maintains  a model  stock program  in its  basic denim  products
under  which Guess can  replenish a customer's inventory  within 48 hours. Guess
generally receives orders for its fashion apparel three to five months prior  to
the  time the products are delivered to  stores. The bulk of the fashion product
orders are received after test  markets for the Fall  and Spring seasons. As  of
March   31,  1996,  the   Company  had  unfilled   wholesale  orders  (excluding
intracompany orders), consisting  primarily of  orders for  fashion apparel,  of
approximately  $65.7 million,  compared to  $69.5 million  of such  orders as of
March 31, 1995. Guess expects to fill substantially all of these orders in 1996.
The backlog of wholesale  orders at any  given time is affected  by a number  of
factors,  including seasonality and the scheduling of manufacturing and shipment
of products.  Accordingly, a  comparison of  backlogs of  wholesale orders  from
period  to period  is not  necessarily meaningful and  may not  be indicative of
eventual actual shipments.

EMPLOYEES

Guess believes  that  its  employees  ("associates") are  one  of  its  most
valuable  resources.  As  of  March 31,  1996,  there  were  approximately 2,600
associates. Total associates include approximately 1,100 in wholesale operations
and approximately 1,500 in retail operations.

Guess is not a party to any  labor agreements and none of its associates  is
represented  by a labor  union. The Company considers  its relationship with its
associates to be good and has not experienced any interruption of its operations
due to labor  disputes. In  addition, the  Company was  among the  first in  the
apparel   industry  to  implement  a  program   to  monitor  the  compliance  of
subcontractors with Federal minimum wage and overtime pay requirements.

PROPERTIES

Certain information concerning  Guess's principal facilities,  all of  which
are leased, is set forth below:

APPROXIMATE AREA
LOCATION                                    USE                         IN SQUARE FEET
- -------------------------------  -----------------------------------------------  ----------------

1444 South Alameda Street        Principal executive and administrative offices,        514,000
Los Angeles, California          design facilities, sales offices, distribution
and warehouse facilities, production control,
sourcing
1385 Broadway                    Administrative offices, public relations,               30,000
New York, New York               showrooms
Kowloon, Hong Kong               Distribution, showrooms, licensing coordination          3,000
control
Milan, Italy                     Showrooms                                                1,800
Florence, Italy                  Administrative offices, design facilities,              17,200
production control, sourcing, retail,
distribution and warehouse facility

The   Company's  corporate,  wholesale  and   retail  headquarters  and  its
production, warehousing and distribution facilities are located in Los  Angeles,
California and consist of seven adjacent buildings totaling

40

approximately  514,000 square feet. Certain of  these facilities are leased from
limited partnerships in which the  sole partners are the Principal  Stockholders
pursuant  to leases that expire in July  2008. The total lease payments to these
limited partnerships  are  $208,000  per  month  with  aggregate  minimum  lease
commitments  at  December 31,  1995  totaling approximately  $32.7  million. See
"Certain Transactions."

ENVIRONMENTAL MATTERS

The Company is  subject to federal,  state and local  laws, regulations  and
ordinances  that  (i)  govern activities  or  operations that  may  have adverse
environmental effects (such as  emissions to air, discharges  to water, and  the
generation,  handling, storage  and disposal of  solid and  hazardous wastes) or
(ii) impose  liability  for  the costs  of  clean  up or  other  remediation  of
contaminated  property,  including  damages  from  spills,  disposals  or  other
releases of hazardous  substances or  wastes, in  certain circumstances  without
regard  to  fault. Certain  of the  Company's  operations routinely  involve the
handling of chemicals and wastes, some of  which are or may become regulated  as
hazardous  substances.  The Company  has not  incurred, and  does not  expect to
incur, any significant expenditures or liabilities for environmental matters. As
a result, the Company believes that its environmental obligations will not  have
a material adverse effect on its results of operations.

In  addition, Guess leases its  showrooms, advertising, licensing, sales and
merchandising offices, remote warehousing facility and retail and factory outlet
store locations  under non-cancelable  operating  lease agreements  expiring  on
various dates through November 2007. These facilities are located principally in
the  United States,  with aggregate minimum  lease commitments,  at December 31,
1995, totaling approximately $135.8 million. The current terms of the  Company's
store leases, including renewal options, expire as follows:

NUMBER
YEARS LEASE TERMS EXPIRE                                                                OF STORES
- ------------------------------------------------------------------------------------  -------------

1995-1997.........................................................................            3
1998-2000.........................................................................            9
2001-2003.........................................................................           22
2004-2006.........................................................................           65
2007-2009.........................................................................           11
2010-2012.........................................................................            2

Guess  believes that  its existing facilities  are well  maintained, in good
operating condition and are adequate to support its present level of operations.
See "Certain Transactions." See Notes 8  and 9 of Notes to Financial  Statements
for further information regarding current lease obligations.

LITIGATION

Guess  is a party to various claims, complaints and other legal actions that
have arisen in the ordinary  course of business from  time to time. The  Company
believes  that the outcome  of all pending legal  proceedings, in the aggregate,
will not have a material adverse effect on the Company's financial condition  or
results of operations.

41

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The  following  table sets  forth  certain information  as  of July  1, 1996
concerning the directors and executive officers of the Company:

NAME               AGE                                       POSITION
- ---------------------      ---      ---------------------------------------------------------------------------

Maurice Marciano               47   Chairman of the Board and Chief Executive Officer
Paul Marciano                  44   President, Chief Operating Officer and Director
Armand Marciano                51   Senior Executive Vice President, Secretary and Director
Ken Duane                      39   President of Worldwide Sales -- Corporate
Roger Williams                 48   Executive Vice President and Chief Financial Officer
Andrea Weiss                   41   President of Retail Operations
Michael Wallen                 43   President, Retail Merchandising

Pursuant to  the Stockholders'  Agreement  described herein  under  "Certain
Transactions,"  the Principal Stockholders  have agreed to  vote their shares of
Common Stock to elect each of Maurice, Paul and Armand Marciano, or one designee
of any such person (if such designee shall be reasonably acceptable to the other
Principal Stockholders), to  the Board  of Directors. Maurice,  Paul and  Armand
Marciano are brothers. Maurice, Paul and Armand Marciano have worked together in
the fashion industry for the last 25 years.

MAURICE  MARCIANO, who was one  of the founders of  the Company in 1981, has
served as Chairman of the Board and Chief Executive Officer of the Company since
August 1993. Mr. Marciano had served as President of the Company from June  1990
to September 1992 and as Executive Vice President from 1981 until June 1990. Mr.
Marciano's  responsibilities include the design  direction of the Company, sales
and merchandising, manufacturing and production as well as financial aspects  of
the  Company. In addition, Mr. Marciano leads the marketing side of the business
with Mr. Paul Marciano. Mr.  Marciano has been a  Director of the Company  since
1981  (except for the period from January  1993 to May 1993). From February 1993
to May  1993,  Mr. Marciano  was  Chairman and  Chief  Executive Officer  and  a
Director of Pepe Clothing USA, Inc.

PAUL  MARCIANO joined the Company two months after its inception in 1981 and
has served as creative director for Guess advertising worldwide since that time.
He has served as President of the Company since September 1992 and as a Director
of the Company since 1990. Mr. Marciano's responsibilities have included  direct
supervisory  responsibility  for international  expansion, licensing,  the legal
department, MIS  and  developing the  Advertising  Department. Mr.  Marciano  is
recognized  for shaping the direction and  look of the Company's advertising and
creating the Company's signature image. Mr. Marciano served as Senior  Executive
Vice President of the Company from August 1990 to September 1992.

ARMAND  MARCIANO joined the  Company two months after  its inception in 1981
and has served as Senior Executive Vice President of the Company since  November
1992.  Mr.  Marciano has  direct  supervisory responsibility  for  the Company's
domestic retail  and  factory  outlet  stores.  In  addition,  Mr.  Marciano  is
responsible  for the manufacturing, distribution,  customer service and European
exports aspects of the business. Mr. Marciano has been a Director and  Secretary
of  the  Company since  1983. From  July 1988  to 1992,  Mr. Marciano  served as
Executive Vice President of the Company.

KEN DUANE will join the Company as President of Worldwide Sales -- Corporate
in June 1996. From June  1990 to June 1996, Mr.  Duane served as Executive  Vice
President Sales and Marketing for Nautica International. Mr. Duane had served as
a  Senior Vice  President Sales and  Marketing for Hugo  Boss International from
October 1985  to July  1990 and  prior to  that time  was a  Vice President  and
National Sales Manager for J. Schoeneman/Burberry's beginning June 1981.

ROGER  WILLIAMS has  been the Executive  Vice President  and Chief Financial
Officer of the Company since March 1994. From October 1992 to February 1994,  he
served  as Executive  Vice President  and Chief  Financial Officer  of The Donna
Karan  Company.  From  July  1990  to  October  1992,  he  was  Executive   Vice

42

President  --  Operations  and  Chief  Financial  Officer  of  Authentic Fitness
Corporation, a  company formed  in  1990 to  acquire  substantially all  of  the
Activewear  division  of Warnaco,  Inc., where  Mr.  Williams served  in various
capacities (ending with Senior Vice President and Chief Financial Officer)  from
May  1986 to June 1990. Since August 1994, Mr. Williams has served as a Director
of Nantucket Industries, Inc.

ANDREA WEISS joined Guess  as President of Retail  Operations for the  Guess
Retail and Factory Division in January 1996. Ms. Weiss was Senior Vice President
and  Director of Stores for Ann Taylor Stores and Ann Taylor Studio Shoe Stores,
and an officer  of Ann  Taylor Stores Corporation,  from July  1992 to  February
1996.  From March 1990 to July 1992,  she was Director of Merchandise Operations
for the Walt Disney World  Resort, a division of  The Walt Disney Company.  From
November 1987 to April 1990, she was Senior Vice President of Operations for the
Naragansett  Clothing Company, a  specialty women's apparel  retailer. Ms. Weiss
sits on the Board of Common Ground, a non-profit organization.

MICHAEL WALLEN has been President, Retail Merchandising since May 1995. From
October 1993 to April 1995, Mr. Wallen served as Executive Vice President of  G.
H.  Bass & Company, a division  of Phillips-Van Heusen Corporation. From January
1992 to August 1993, he served as  President of Merchandising of Macy's West,  a
division of R. H. Macy & Co., Inc. From January 1988 to January 1992, Mr. Wallen
served  as Senior Vice President of Macy's  California, Inc., a subsidiary of R.
H. Macy & Co., Inc. Mr. Wallen began  his professional career with R. H. Macy  &
Co., Inc. in New York and spent 19 years with the firm.

BOARD OF DIRECTORS

The Company's Board of Directors is currently comprised of Maurice, Paul and
Armand  Marciano.  Shortly  following  the consummation  of  the  Offerings, the
Company intends to appoint two directors who are neither officers nor  employees
of  the Company or its affiliates and, within one year following consummation of
the Offerings, to appoint an additional two such directors.

Upon the appointment  of the first  two additional directors,  the Board  of
Directors  will establish an  Audit Committee and  a Compensation Committee. The
Audit Committee will be responsible for  recommending to the Board of  Directors
the engagement of the independent auditors of the Company and reviewing with the
independent  auditors  the  scope  and  results  of  the  audits,  the  internal
accounting controls  of  the  Company,  audit  practices  and  the  professional
services  furnished by the independent auditors. The Compensation Committee will
be responsible for  reviewing and  approving all  compensation arrangements  for
officers of the Company, and will also be responsible for administering the 1996
Equity Plan.

The  General  Corporation  Law  of  the  State  of  Delaware  (the "Delaware
Corporation Law")  provides  that a  company  may indemnify  its  directors  and
officers  as to certain liabilities.  The Company's Certificate of Incorporation
and Bylaws provide for the indemnification of its directors and officers to  the
fullest  extent permitted by law, and the Company intends to enter into separate
indemnification agreements with each of its directors and officers to effectuate
these provisions and to purchase  directors' and officers' liability  insurance.
The  effect of such provisions is to  indemnify, to the fullest extent permitted
by law, the directors  and officers of the  Company against all costs,  expenses
and  liabilities  incurred  by  them  in connection  with  any  action,  suit or
proceeding in which they  are involved by reason  of their affiliation with  the
Company.

COMPENSATION OF DIRECTORS

Directors  who  are employees  of the  Company  receive no  compensation for
serving on the Board  of Directors. It  is expected that  directors who are  not
employees  of the Company will receive a  retainer fee of $         per year for
their services. All directors are reimbursed for expenses incurred in connection
with attendance at board or committee meetings.

In addition, pursuant to the Directors' Plan, each non-employee director  of
the  Company, upon  joining the Board  of Directors,  will receive non-qualified
options to  purchase                shares  of Common  Stock  and  will  receive
non-qualified  options to purchase an additional          shares of Common Stock
on the first  day of each  fiscal year  thereafter. The exercise  price of  such
options  will be  equal to  the fair  market value  of the  Common Stock  on the
respective date of grant,  the term of  the options will be  ten years, and  the
options  will become exercisable in  25% installments on each  of the first four
anniversaries of the date of grant.  See "-- 1996 Non-Employee Directors'  Stock
Option Plan."

43

EXECUTIVE COMPENSATION

The  following  table  sets forth  each  component of  compensation  paid or
awarded to, or earned by, the Chief  Executive Officer and the four most  highly
compensated executive officers other than the Chief Executive Officer serving as
of December 31, 1995 (the "Named Executive Officers") for the fiscal years ended
December 31, 1993, 1994 and 1995.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION
----------------------------------------------------------
OTHER ANNUAL           ALL OTHER
NAME AND PRINCIPAL POSITION         YEAR        SALARY        BONUS       COMPENSATION (1)     COMPENSATION (2)
- ------------------------------------  ---------  ------------  ------------  -------------------  -------------------

Maurice Marciano                           1995  $  2,000,000  $  1,200,000      $   378,230           $   2,250
Chairman of the Board and Chief           1994     2,000,000     1,950,000          438,990               2,250
Executive Officer (3)                     1993       653,846       728,097          --                    2,250
Paul Marciano                              1995     1,560,000       900,000          192,464               2,250
President and Chief Operating             1994     1,560,000     2,250,000          343,317               2,250
Officer                                   1993     1,560,000     3,700,485           33,302               2,250
Armand Marciano                            1995       742,306       900,000          202,512               2,250
Senior Executive Vice President           1994       600,000     1,800,000          278,041               2,250
1993       599,997     3,700,485           32,743               2,250
Roger Williams                             1995       450,000       --                30,620               2,250
Executive Vice President and Chief        1994       342,308       100,000          147,152              --
Financial Officer
Michael Wallen (4)                         1995       246,154        25,000           55,792              --
President, Retail Merchandising

- ------------------------

(1)  Amounts  of 1995 Other  Annual Compensation in  excess of 25%  of the total
indicated for such executive officer  include the following: (i)  $192,256,
$55,720  and $65,230 for transportation for Maurice Marciano, Paul Marciano
and Armand Marciano,  respectively, (ii) $179,000,  $130,000, $130,000  and
$18,400  for  life insurance  for Maurice  Marciano, Paul  Marciano, Armand
Marciano and Roger Williams, respectively, and (iii) $55,701 for relocation
and other housing related expenses for Michael Wallen.

Amounts of 1994  Other Annual Compensation  in excess of  25% of the  total
indicated  for such executive  officer include the  following: (i) $248,103
and $89,012  for transportation  for Maurice  Marciano and  Paul  Marciano,
respectively,  (ii) $184,088, $212,026 and  $207,115 for life insurance for
Maurice Marciano,  Paul Marciano  and  Armand Marciano,  respectively,  and
(iii)  $119,059 for relocation and other housing related expenses for Roger
Williams.

Amounts of 1993  Other Annual Compensation  in excess of  25% of the  total
indicated  for  such  executive  officer include  $33,302  and  $32,743 for
transportation for Paul Marciano and Armand Marciano, respectively.

(2)  Includes contributions to the Company's  401(k) Savings Plan dated  January
1, 1992, by the Company for such executive officers.

(3)  Mr. Marciano rejoined the Company in August 1993.

(4)  Michael Wallen joined the Company in May 1995.

EMPLOYMENT AGREEMENTS

The   Company  has  entered  into   individual  employment  agreements  (the
"Executive Employment Agreements") with each of Maurice Marciano, Paul  Marciano
and  Armand  Marciano  (the "Executives").  The  initial term  of  the Executive
Employment Agreements  begins on  the date  of this  Prospectus (the  "Effective
Date")  and will terminate on  the third anniversary of  the Effective Date. The
Executive Employment Agreements will automatically extend after the initial term
for successive one-year terms,  unless notice not to  extend is given by  either
party  at least 90 days prior to the end of the then current term. The Executive

44

Employment Agreements provide for  an annual base  salary of $900,000,  $900,000
and   $650,000  for  Maurice  Marciano,   Paul  Marciano  and  Armand  Marciano,
respectively, which may be increased based on annual reviews by the Compensation
Committee. In addition, the Executive  Employment Agreements provide for  annual
bonuses  to be determined in accordance with a  bonus plan to be approved by the
Compensation Committee, with a  minimum expected target bonus  equal to 100%  of
base  salary.  Commencing  on  the  expiration  of  the  term  of  the Executive
Employment Agreement, or  earlier should the  Executive Employment Agreement  be
terminated  other than for cause (as defined in the agreements), the Company and
Maurice Marciano, Paul  Marciano or Armand  Marciano, as the  case may be,  will
enter  into  a two-year  consulting agreement  under  which such  Executive will
render certain consulting  services for  which the  Company will  pay an  annual
consulting  fee of $100,000. In addition,  each Executive is entitled to certain
fringe benefits, including  access for  business reasons to  aircraft leased  or
owned by the Company and full Company-paid health and life insurance for himself
and  his  immediate family  during his  lifetime.  If any  of the  Executives is
terminated without cause or resigns for  good reason (as such terms are  defined
in  the Executive  Employment Agreements), then  such Executive  will receive as
severance his then current base salary and annual target bonus for the remainder
of his term of  employment. The Executive will  also continue to participate  in
Company-sponsored  health,  life insurance  and other  fringe benefit  plans and
programs during  the  severance period,  unless  the Executive  is  entitled  to
substantially  equivalent benefits  from a  subsequent employer.  Each Executive
Employment  Agreement  further  provides  that  upon  the  death  or   permanent
disability  of the Executive, such Executive (or his beneficiary) will receive a
pro rata  portion  of  his  annual  target bonus  for  the  year  in  which  the
Executive's  death  or  permanent disability  occurs.  The  Executive Employment
Agreements   also   include   certain   noncompetition,   nonsolicitation    and
confidentiality provisions.

The  Company entered into an employment agreement,  dated as of May 14, 1996
(the  "Duane   Agreement"),   with  Ken   Duane   as  President   of   Worldwide
Sales-Corporate  for a term of three years. Under the Duane Agreement, Mr. Duane
is entitled to  (i) a  base salary  of $550,000,  $600,000 and  $650,000 in  the
first, second and third years of the term, respectively; (ii) a guaranteed bonus
of  $250,000 in  the first year  of the  term, a performance  bonus ranging from
$100,000 to $300,000  in the second  year of  the term and  a performance  bonus
ranging  from $100,000  to $325,000  in the  third year  of the  term; and (iii)
participation in various health, life  insurance and other fringe benefit  plans
and  programs maintained by the Company. Immediately prior to the Offerings, Mr.
Duane will be  granted nonqualified options  to purchase       shares of  Common
Stock,  consisting of options  to purchase       shares at an  exercise price of
$    per share and options to purchase     shares at an exercise price equalling
the greater of $    per share or the price per share at which shares are sold in
the Offerings. On the date of the  Offerings, Mr. Duane will be fully vested  in
options  to purchase     shares at an  exercise price of $  per share. Mr. Duane
may elect to receive a cash payment  of $1.0 million prior to the Offerings.  If
Mr.  Duane elects to receive such cash  payment, the exercise price of
options described above will be  $    per  share. If the Company terminates  Mr.
Duane's  employment other than for cause (as defined in the Duane Agreement), he
will be entitled to the balance of the compensation described above, subject  to
mitigation.

The  Company's  employment  agreement  with  Roger  Williams  (the "Williams
Agreement"), pursuant to which Mr.  Williams serves as Executive Vice  President
and  Chief Financial Officer of the Company, expires on March 1, 1999. Under the
Williams Agreement, Mr.  Williams is entitled  to (i) a  base salary  (currently
$450,000),  subject to increase  based upon an annual  performance review by the
Board, (ii) an  annual performance  bonus based  upon the  profitability of  the
Company of up to 50% of his base salary for such year and (iii) participation in
various  health,  life insurance  and other  fringe  benefit plans  and programs
maintained by the Company. Immediately prior to the Offerings, Mr. Williams will
be granted nonqualified stock options fully  exercisable after March 1, 1999  to
purchase          shares  of Common Stock at  an exercise price of  $        per
share. Portions of Mr. Williams's stock options will vest each February 28  from
1997 through 1999. Certain termination and change of control events set forth in
his  employment agreement  will accelerate the  vesting of his  stock options or
enable Mr. Williams to immediately exercise his stock options to the extent then
vested. In addition, if Mr. Williams's  employment is terminated by the  Company
other  than for  cause, or  if he  resigns for  good reason  (as such  terms are
defined in the Williams Agreement),  he will be entitled  (i) to receive a  lump
sum  cash payment  equal to his  base salary  and his performance  bonus for one

45

year and (ii) to continue for  the one-year period following his termination  to
be  covered, together with his spouse  and dependents, at the Company's expense,
under all  medical, health  and accident  insurance or  other such  health  care
arrangements  maintained for his benefit  immediately prior to such termination.
Mr.  Williams's  employment  agreement  also  includes  certain  noncompetition,
nonsolicitation and confidentiality provisions.

The  Company entered into  an employment agreement  with Andrea Weiss, dated
January 22, 1996 (the "Weiss Agreement"), pursuant to which Ms. Weiss will serve
as President of Retail Operations of the Company for a term of two years.  Under
the  Weiss Agreement,  Ms. Weiss  is entitled  to (i)  a base  salary (currently
$375,000); (ii) an annual performance  bonus ranging from $125,000 to  $325,000,
depending  on the performance of  the Retail Division of  the Company; and (iii)
participation in various health, life  insurance and other fringe benefit  plans
and  programs maintained by the Company. The Company has an option to extend the
term of  employment  for an  additional  two  years. Upon  consummation  of  the
Offerings,  Ms. Weiss will be eligible to participate in the 1996 Equity Plan at
a level commensurate with her executive level of employment. See "-- 1996 Equity
Incentive Plan." If Ms.  Weiss's employment is terminated  by the Company  other
than  for cause at  any time during the  first two years  of her employment, she
will be entitled to the balance  of her salary for the  two years plus up to  an
additional six months' salary.

1996 EQUITY INCENTIVE PLAN

Prior to the consummation of the Offerings, the Company intends to adopt the
1996  Equity Plan. The 1996 Equity Plan will be administered by the Compensation
Committee. The 1996  Equity Plan provides  for the granting  of incentive  stock
options  (within the meaning of Section 422  of the Code) and nonqualified stock
options, stock  appreciation rights,  restricted  stock, performance  units  and
performance  shares  (individually, an  "Award,"  or collectively,  "Awards") to
those officers,  and other  key  employees and  consultants, with  potential  to
contribute  to the future success of  the Company or its subsidiaries; PROVIDED,
that only employees  may be  granted incentive stock  options. The  Compensation
Committee  has discretion to select  the persons to whom  Awards will be granted
(from among  those  eligible),  to  determine  the  type,  size  and  terms  and
conditions applicable to each Award and the authority to interpret, construe and
implement  the provisions of the 1996  Equity Plan; PROVIDED, that in accordance
with the requirements  under Section  162(m) of  the Code,  no participant  will
receive  a grant of stock  options or stock appreciation  rights with respect to
more than           shares of  Common Stock in any  Plan year. The  Compensation
Committee's  decisions  are  binding  on the  Company  and  persons  eligible to
participate in the 1996 Equity Plan and all other persons having any interest in
the 1996 Equity Plan. It is  presently anticipated that approximately
individuals will initially participate in the 1996 Equity Plan.

The  maximum number of shares of Common  Stock that may be subject to Awards
under the  1996 Equity  Plan,  including Awards  granted concurrently  with  the
Offerings,  is 10% of the outstanding Common  Stock as of the first business day
following the  Closing Date,  or approximately              shares,  subject  to
adjustment  in accordance with the  terms of the 1996  Equity Plan. Common Stock
issued under the 1996 Equity Plan may be either authorized but unissued  shares,
treasury  shares or any combination thereof.  Any shares of Common Stock subject
to an  Award which  lapses, expires  or  is otherwise  terminated prior  to  the
issuance of such shares may become available for new Awards.

46

The  following table shows the dollar value and number of Options awarded to
the individuals and groups listed below pursuant to the 1996 Equity Plan:

NEW PLAN BENEFITS
1996 EQUITY INCENTIVE PLAN

NAME                                                                              DOLLAR VALUE($)    NUMBER OF OPTIONS
- ------------------------------------------------------------------------------  -------------------  ------------------

Maurice Marciano                                                                     $       0                    0
Paul Marciano                                                                                0                    0
Armand Marciano                                                                              0                    0
Roger Williams                                                                                              200,000
Michael Wallen                                                                                               50,000
Executive Group
Non-Employee Director Group                                                                  0                    0
Non-Executive Officer Employee Group

In connection  with  the  Offerings,  the  Company  also  intends  to  grant
non-qualified options under the 1996 Equity Plan with respect to an aggregate of
shares  of  Common  Stock  to certain  current  employees  who  have been
employed by the Company or any of its subsidiaries for more than five years. The
date of  grant of  such options  will  be the  date of  the Offerings,  and  the
exercise  price per share  of such options  will be the  initial public offering
price of the Common Stock in the Offerings. Each such option will be immediately
exercisable and will expire five years after the date of grant.

Set forth below is a description of the types of Awards which may be granted
under the 1996 Equity Plan:

STOCK OPTIONS.   Options (each, an  "Option") to purchase  shares of  Common
Stock,  which may  be nonqualified  or incentive  stock options,  may be granted
under the 1996 Equity Plan at an exercise price (the "Option Price")  determined
by  the Compensation Committee in its discretion, PROVIDED that the Option Price
of incentive stock  options may be  no less than  the fair market  value of  the
underlying  Common Stock on the date of grant  (110% of fair market value in the
case of an incentive stock option granted to a ten percent shareholder).

Options will expire not later  than ten years after  the date on which  they
are  granted (five years in  the case of an incentive  stock option granted to a
ten percent shareholder). Options become exercisable  at such times and in  such
installments as determined by the Compensation Committee; PROVIDED that all such
Options will be fully exercisable within five years after the date on which they
are  granted, and such exercisability  may be based on  (i) length of service or
(ii) the  attainment  of  performance  goals  established  by  the  Compensation
Committee;  PROVIDED FURTHER that no Option granted  before August 15, 1996 to a
person who is subject to Section 16 of the Exchange Act may be exercised  within
the  first six  months following  the date  of grant.  Subject to  the preceding
proviso, the Compensation  Committee may also  accelerate the time  or times  at
which  any or all Options  held by an optionee may  be exercised. Payment of the
Option Price must be made in full at the time of exercise in cash, certified  or
bank  check,  or  other  instrument acceptable  to  the  Compensation Committee.
Payment in full or in part may also  be made by tendering to the Company  shares
of  Common Stock having a  fair market value equal to  the Option Price (or such
portion thereof), by means of a "cashless exercise" procedure to be approved  by
the  Compensation Committee or by withholding  shares of Common Stock that would
otherwise have been issued to the optionee in connection with the exercise of an
Option.

47

STOCK APPRECIATION RIGHTS.  A stock  appreciation right ("SAR") is an  Award
entitling  the recipient  to receive an  amount equal  to (or less  than, if the
Compensation Committee so  determines at the  time of grant)  the excess of  the
fair  market value of a share  of Common Stock on the  date of exercise over the
exercise price per  share specified  for the SAR,  multiplied by  the number  of
shares of Common Stock with respect to which the SAR is then being exercised. An
SAR  granted in connection with an Option will be exercisable to the extent that
the related Option is  exercisable. Upon the  exercise of an  SAR related to  an
Option, the Option related thereto will be cancelled to the extent of the number
of  shares covered by such exercise and  such shares will no longer be available
for grant under the 1996 Equity Plan. Upon the exercise of a related Option, the
SAR will  be cancelled  automatically to  the  extent of  the number  of  shares
covered  by the exercise of the Option. SARs unrelated to an Option will contain
such terms and  conditions as  to exercisability,  vesting and  duration as  the
Compensation Committee may determine, but such duration will not be greater than
ten years. The Compensation Committee may accelerate the period for the exercise
of  an SAR Payment upon exercise of an SAR  will be made, at the election of the
Compensation Committee, in  cash, in  shares of  Common Stock  or a  combination
thereof.  In  no  event  shall  an  SAR granted  prior  to  August  15,  1996 be
exercisable within the first six months after  the date such SAR is granted,  or
in  the case of  an SAR granted  prior to August  15, 1996 and  in tandem with a
Stock Option, within the first six months after the date of grant of the related
stock option.

The Compensation Committee may grant  limited stock appreciation rights  (an
"LSAR")  under the 1996 Equity Plan. An LSAR is an SAR which becomes exercisable
only in the event  of a "change  in control" (as defined  below). Any such  LSAR
will  be settled  solely in cash.  An LSAR  must be exercised  within the 30-day
period following a change in control.

RESTRICTED STOCK.  An Award of  restricted stock ("Restricted Stock") is  an
Award  of Common Stock which is subject to such restrictions as the Compensation
Committee deems appropriate,  including forfeiture  conditions and  restrictions
against  transfer for  a period  specified by  the Compensation  Committee. With
respect to Restricted Stock Awards made prior to August 15, 1996, a  participant
may  not sell, assign,  transfer, pledge or  otherwise dispose of  such an Award
during the six  month period  commencing on the  date of  the Award.  Restricted
Stock  Awards  may  be  granted  under  the  1996  Equity  Plan  for  or without
consideration. Restrictions on Restricted Stock may lapse in installments  based
on  factors selected by the  Compensation Committee. The Compensation Committee,
in its sole discretion, may waive  or accelerate the lapsing of restrictions  in
whole  or in part. Prior  to the expiration of  the restricted period, except as
otherwise provided by the Compensation Committee,  a grantee who has received  a
Restricted Stock Award has the rights of a shareholder of the Company, including
the  right to vote  and to receive cash  dividends on the  shares subject to the
Award. Stock dividends  issued with respect  to shares covered  by a  Restricted
Stock  Award will be treated  as additional shares under  such Award and will be
subject to the same  restrictions and other terms  and conditions that apply  to
the shares with respect to which such dividends are issued.

PERFORMANCE  SHARES;  PERFORMANCE  UNITS.    A  performance  share  Award (a
"Performance Share")  is  an Award  which  represents  the right  to  receive  a
specified  number  of  shares  of  Common  Stock  upon  satisfaction  of certain
specified performance criteria, subject  to such other  terms and conditions  as
the Compensation Committee deems appropriate. A performance unit (a "Performance
Unit")  is an Award of  a number of units entitling  the recipient to receive an
amount equal to (or  less than, if the  Compensation Committee so determines  at
the  time of grant)  the excess of  the fair market  value of a  share of Common
Stock on  the  relevant  date  over  the  price  per  share  specified  for  the
Performance  Unit,  multiplied  by the  number  of Units,  upon  satisfaction of
certain  specified  performance  criteria,  subject  to  such  other  terms  and
conditions   as  the  Compensation   Committee  deems  appropriate.  Performance
objectives will be  established before,  or as  soon as  practicable after,  the
commencement  of the  performance period (the  "Performance Period")  and may be
based on net earnings,  operating earnings or  income, absolute and/or  relative
return  on equity  or assets,  earnings per  share, cash  flow, pre-tax profits,
earnings growth, revenue growth, comparisons to peer companies, any  combination
of  the foregoing and/or  such other measures,  including individual measures of
performance, as the Compensation Committee  deems appropriate. Prior to the  end
of  a Performance Period, the Compensation Committee, in its discretion and only
under  conditions  which  do  not  affect  the  deductibility  of   compensation
attributable  to Performance  Shares or Performance  Units, as the  case may be,

48

under Section  162(m) of  the Code,  may adjust  the performance  objectives  to
reflect  an event which may materially affect  the performance of the Company, a
subsidiary or a division, including, but not limited to, market conditions or  a
significant  acquisition  or  disposition of  assets  or other  property  by the
Company, a subsidiary or a division. The  extent to which a grantee is  entitled
to  payment in  settlement of  a Performance Share  Award or  a Performance Unit
Award  at  the  end  of  the  Performance  Period  will  be  determined  by  the
Compensation Committee, in its sole discretion, based on whether the performance
criteria have been met.

Payment  in settlement  of a Performance  Share Award or  a Performance Unit
Award will  be  made as  soon  as practicable  following  the last  day  of  the
Performance  Period, or  at such  other time  as the  Compensation Committee may
determine, in shares of Common Stock or cash, respectively.

ADDITIONAL INFORMATION.  Under the 1996 Equity Plan, if there is any  change
in  the outstanding  shares of  Common Stock  by reason  of any  stock dividend,
recapitalization, merger, consolidation, stock split, combination or exchange of
shares or other form of reorganization, or any other change involving the Common
Stock,  such  proportionate  adjustments  as  may  be  necessary  (in  the  form
determined by the Compensation Committee) to reflect such change will be made to
prevent  dilution or enlargement of rights  with respect to the aggregate number
of shares of Common  Stock for which  Awards in respect  thereof may be  granted
under the 1996 Equity Plan, the number of shares of Common Stock covered by each
outstanding  Award and  the price  per share  in respect  thereof. Generally, an
individual's  rights  under  the  1996  Equity  Plan  may  not  be  assigned  or
transferred (except in the event of death).

In the event of a change in control and except as the Compensation Committee
(as  constituted  prior  to  such  change  in  control)  may  expressly  provide
otherwise:  (i)  all  Options  or  SARs  then  outstanding  will  become   fully
exercisable  as  of the  date  of the  change in  control,  whether or  not then
exercisable; (ii) all restrictions and conditions of all Restricted Stock Awards
then outstanding will lapse as of the  date of the change in control; (iii)  all
Performance Share Awards and Performance Unit Awards will be deemed to have been
fully  earned as of the date of the change  in control and (iv) in the case of a
change in control involving a merger of, or consolidation involving, the Company
in which  the Company  is  (A) not  the  surviving corporation  (the  "Surviving
Entity")  or  (B)  becomes a  wholly  owned  subsidiary of  such  acqurior, each
outstanding Option  granted under  the Plan  and not  exercised (a  "Predecessor
Option")  will be  converted into an  option (a "Substitute  Option") to acquire
common stock of the Surviving Entity, which Substitute Option will have the same
terms and conditions as the Predecessor Option, with appropriate adjustments  as
to the number and kind of shares and exercise prices. The above notwithstanding,
any  Award granted before August 15, 1996 to  a person who is subject to Section
16 of the Exchange Act and within six months of a change in control will not  be
afforded  any such  acceleration as to  exercise, vesting and  payment rights or
lapsing as to conditions or restrictions.  For purposes of the 1996 Equity  Plan
and  the Directors' Plan, a "change in control" shall have occurred when (A) any
person or  "group" within  the meaning  of  Sections 13(d)  or 14(d)(2)  of  the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than (x)
the  Company, any subsidiary  of the Company,  any employee benefit  plan of the
Company or of any subsidiary of the Company, or any person or entity  organized,
appointed  or established by the Company or any subsidiary of the Company for or
pursuant to the terms of any such  plans or (y) Maurice Marciano, Paul  Marciano
or Armand Marciano, any trust established in whole or in part for the benefit of
one  or more of them or their family  members, or any other entity controlled by
one or  more of  them), alone  or together  with its  affiliates and  associates
(collectively,  an "Acquiring Person"), shall become the beneficial owner of 20%
or more of either (i)  the then outstanding shares of  Common Stock or (ii)  the
combined  voting  power  of  the Company's  then  outstanding  voting securities
(except pursuant to an  offer for all  outstanding shares of  Common Stock at  a
price  and  upon such  terms  and conditions  as  a majority  of  the Continuing
Directors (as  defined below)  determine to  be  in the  best interests  of  the
Company and its shareholders (other than an Acquiring Person on whose behalf the
offer  is  being  made)),  (B)  during  any  period  of  two  consecutive years,
individuals who  at  the  beginning  of such  period  constitute  the  Board  of
Directors and any new director (other than a director who is a representative or
nominee  of an  Acquiring Person)  whose election by  the Board  of Directors or
nomination for election by the Company's shareholders was approved by a vote  of
at  least  a majority  of the  directors then  still in  office who  either were
directors at the  beginning of the  period or whose  election or nomination  for
election  was previously so approved (collectively, the "Continuing Directors"),
no longer

49

constitute a majority  of the Board  of Directors, (C)  the shareholders of  the
Company  approve  a  merger  or  consolidation of  the  Company  with  any other
corporation, other than  a merger  or consolidation  which would  result in  the
voting   securities  of  the  Company   outstanding  immediately  prior  thereto
continuing to represent (either by  remaining outstanding or by being  converted
into  voting securities of  the Surviving Entity)  at least 80%  of the combined
voting power of the  voting securities of the  Company or such Surviving  Entity
outstanding   immediately  after  such  merger  or  consolidation;  or  (D)  the
shareholders of  the Company  approve a  plan of  reorganization (other  than  a
reorganization  under the United States Bankruptcy Code) or complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's  assets; PROVIDED, HOWEVER, that a  change
in  control shall not be deemed  to have occurred in the  event of (x) a sale or
conveyance in which the Company continues as  a holding company of an entity  or
entities  that conduct  all or substantially  all of the  business or businesses
formerly conducted by  the Company  or (y)  any transaction  undertaken for  the
purpose  of reincorporating the Company under  the laws of another jurisdiction,
if such transaction does not materially  affect the beneficial ownership of  the
Company's capital stock.

The  1996 Equity Plan will remain in effect until terminated by the Board of
Directors  and  thereafter  until  all  Awards  granted  thereunder  are  either
satisfied  by the issuance of  shares of Common Stock or  the payment of cash or
terminated pursuant to  the terms of  the 1996  Equity Plan or  under any  Award
agreements.  Notwithstanding the foregoing,  no Awards may  be granted under the
1996 Equity Plan after the tenth anniversary  of the effective date of the  1996
Equity  Plan. The Board of Directors may  at any time terminate, modify or amend
the 1996 Equity Plan; PROVIDED, HOWEVER, that no such amendment, modification or
termination may adversely  affect an  optionee's or grantee's  rights under  any
Award theretofore granted under the 1996 Equity Plan, except with the consent of
such  optionee  or  grantee,  and  no such  amendment  or  modification  will be
effective unless  and until  the same  is approved  by the  shareholders of  the
Company  where such shareholder  approval is required to  comply with Rule 16b-3
under the Exchange  Act Section  162(m) of the  Code, or  other applicable  law,
regulation or Nasdaq National Market or stock exchange rule.

CERTAIN  FEDERAL INCOME TAX CONSEQUENCES OF OPTIONS.  Certain of the Federal
income tax consequences to  optionees and the Company  of Options granted  under
the 1996 Equity Plan should generally be as set forth in the following summary.

An  employee to whom an incentive stock option ("ISO") which qualifies under
Section 422 of  the Code is  granted will not  recognize income at  the time  of
grant  or exercise  of such Option.  However, upon  the exercise of  an ISO, any
excess in  the fair  market price  of the  Common Stock  over the  Option  Price
constitutes  a  tax  preference  item which  may  have  alternative  minimum tax
consequences for the employee. If the  employee sells such shares more than  one
year after the date of transfer of such shares and more than two years after the
date  of grant of  such ISO, the  employee will generally  recognize a long-term
capital gain or loss equal to the difference, if any, between the sale prices of
such shares and the Option Price. The Company will not be entitled to a  federal
income  tax deduction in connection with the grant or exercise of the Option. If
the employee  does  not hold  such  shares for  the  required period,  when  the
employee  sells such shares,  the employee will  recognize ordinary compensation
income and possibly capital gain or loss (long-term or short-term, depending  on
the  holding period of the stock sold) in  such amounts as are prescribed by the
Code and the regulations thereunder and  the Company will generally be  entitled
to  a Federal income tax  deduction in the amount  of such ordinary compensation
income recognized by the employee.

An employee to whom a nonqualified stock option ("NSO") is granted will  not
recognize  income  at the  time  of grant  of  such Option.  When  such employee
exercises such NSO,  the employee  will recognize  ordinary compensation  income
equal  to the excess, if any, of the fair market value, as of the date of Option
exercise, of the shares the employee receives upon such exercise over the Option
Price paid. The tax basis of such shares  to such employee will be equal to  the
Option  Price paid plus the  amount, if any, includible  in the employee's gross
income, and the employee's holding period  for such shares will commence on  the
date  on which the employee recognizes taxable income in respect of such shares.
Gain or  loss upon  a subsequent  sale of  any Common  Stock received  upon  the
exercise of a nonqualified stock option generally would be taxed as capital gain
or loss (long-term or short-term, depending upon the holding period of the stock
sold). Certain

50

additional  rules apply if  the exercise price  for an option  is paid in shares
previously owned by the participant.
Subject to the applicable provisions of the Code and regulations thereunder, the
Company will generally be entitled to a Federal income tax deduction in  respect
of  a NSO in an  amount equal to the  ordinary compensation income recognized by
the employee. This deduction will, in  general, be allowed for the taxable  year
of the Company in which the participant recognizes such ordinary income.

1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

Prior to the consummation of the Offerings, the Company intends to adopt the
Directors'  Plan. The purposes of the Directors'  Plan are to attract and retain
as non-employee  directors individuals  with superior  training, experience  and
ability  and to provide additional incentives to such individuals by giving them
an opportunity to participate in the  ownership of Common Stock of the  Company.
All  directors who are not employees of  the Company are eligible to participate
in the  Directors' Plan.  It is  presently anticipated  that approximately  four
individuals will participate in the Directors' Plan.

Under  the Directors' Plan, any person who is not an employee of the Company
and who becomes a  director either on  or after the date  of the Offerings  will
receive  a non-qualified option (a "Non-Qualified Option") to purchase
shares of Common Stock on the date he or she becomes a director. In addition, on
the first business day of each fiscal year of the Company, commencing January 1,
1997, while the Directors' Plan is in effect (each, an "Eligibility Date"), each
non-employee director who has not  been an employee of  the Company at any  time
during  the  previous  twelve  months will  receive  a  Non-Qualified  Option to
purchase         shares of Common Stock.

The aggregate number of shares of Common Stock that may be issued under  the
Directors'  Plan is         , subject to adjustment in accordance with the terms
of the Directors'  Plan. Common Stock  issued under the  Directors' Plan may  be
either authorized but unissued shares, treasury shares or a combination thereof.
Any  shares  of Common  Stock subject  to a  Non-Qualified Option  which lapses,
expires or  is otherwise  terminated without  the issuance  of such  shares  may
become available for new awards.

All  Non-Qualified Options granted  under the Directors'  Plan will vest and
become exercisable in 25% installments in  each of the first four  anniversaries
of  the  date of  grant;  PROVIDED that  the  participant may  not  exercise any
Non-Qualified Option as to less than 100 shares at any one time or, if the total
remaining number of shares is less  than 100, the participant must exercise  the
entire  remaining shares  covered by the  Non-Qualified Option.  However, in the
event of  a  change in  control  of the  Company  (as defined  below),  (i)  all
Non-Qualified Options then outstanding will become fully exercisable and (ii) in
the  case  of  a change  in  control  involving a  merger  of,  or consolidation
involving, the Company in which the Company  is (A) not the Surviving Entity  or
(B)  becomes a wholly owned subsidiary of the Surviving Entity, each Predecessor
Option will be converted into a Substitute Option to acquire common stock of the
Surviving  Entity,  which  Substitute  Option  will  have  the  same  terms  and
conditions  as the  Predecessor Option, with  appropriate adjustments  as to the
number and kind  of shares and  exercise prices. See  "-- 1996 Equity  Incentive
Plan -- Additional Information" above for the definition of "change in control."

The  price  of the  shares  of Common  Stock  purchased upon  exercise  of a
Non-Qualified Option will be the fair market value of the Common Stock as of the
date of grant. The exercise price must be  paid in full at the time of  exercise
in cash, certified or bank check, or other instrument acceptable to the Board of
Directors.  Payment in  full or  in part may  also be  made by  tendering to the
Company shares of Common Stock having a fair market value equal to the  exercise
price  (or such portion thereof), by means of a "cashless exercise" procedure to
be approved by the Board of Directors  or by withholding shares of Common  Stock
that  would otherwise have been issued to  the optionee upon the exercise of the
Non-Qualified Option. The Company  may also loan  optionees sufficient funds  to
exercise any Non-Qualified Option.

ADDITIONAL  INFORMATION.   Non-Qualified  Options granted  or to  be granted
under the Directors' Plan are nontransferable. Each Non-Qualified Option granted
will expire ten years from the date of grant and cannot be exercised after  that
time.  In addition, if any participant ceases to be an eligible director for any
reason other than  death or disability,  any Non-Qualified Option  held by  such
participant may thereafter be exercised, to the extent it was exercisable at the
time   of   termination,   for  a   period   of   six  months   from   the  time

51

of termination  or the  expiration  of the  stated  term of  such  Non-Qualified
Option, whichever period is shorter; PROVIDED, HOWEVER, that if such participant
dies within such six-month period, any unexercised Non-Qualified Options held by
such  participant will be exercisable, to the  extent exercisable at the time of
death, for  a period  of one  year from  the date  of such  death or  until  the
expiration of the stated term of any such Non-Qualified Option, whichever period
is  shorter. If any participant  ceases to be an  eligible director by reason of
death or  disability, any  Non-Qualified  Option held  by such  participant  may
thereafter  be  exercised, to  the  extent it  was  exercisable at  the  time of
termination, for a period of one year from the date of such termination or until
the expiration of the stated term of such Non-Qualified Option, whichever period
is shorter; PROVIDED,  that if a  participant who is  disabled dies within  such
one-year  period, any unexercised Non-Qualified  Option held by such participant
will thereafter be exercisable, to the extent it was exercisable at the time  of
death,  for  a period  of one  year from  the date  of such  death or  until the
expiration of the stated term of such Non-Qualified Option, whichever period  is
shorter.

Unless  it is terminated at  an earlier date by  the Board of Directors, the
Directors' Plan shall terminate ten  years after the date Non-Qualified  Options
are first granted under the Plan.

The  Board of  Directors has full  and exclusive  discretionary authority to
revise administrative rules  and guidelines  governing the  Directors' Plan,  to
interpret  the terms of the Directors'  Plan and related agreements, to delegate
its responsibility and  authority under  the Directors' Plan,  and to  generally
supervise  the administration of the Directors'  Plan. In addition, the Board of
Directors may  amend, alter  or discontinue  the Directors'  Plan at  any  time;
PROVIDED,  that the Board of Directors may not  act to impair the rights of plan
participants pursuant  to Non-Qualified  Options  previously granted  under  the
Directors'   Plan  without  the  optionee's  consent,  or  cause  an  optionee's
transactions not to be exempt under Rule 16b-3 of the Exchange Act. No amendment
or modification will be effective unless and  until the same is approved by  the
shareholders  of  the Company  where such  shareholder  approval is  required to
comply with Rule 16b-3 under the Exchange Act.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF NON-QUALIFIED OPTIONS.   Although
no  Federal  income  tax  liability  accrues to  a  participant  at  the  time a
Non-Qualified  Option  is  granted,  the  participant  must  recognize  ordinary
compensation  income in the year in  which the Non-Qualified Option is exercised
equal to the amount by  which the fair market value  of the purchased shares  on
the date of exercise exceeds the exercise price. The tax basis of such shares to
such  participant  will be  equal to  the  exercise price  paid plus  the amount
includible in  the participant's  gross income,  and the  participant's  holding
period  for  such shares  will commence  on  the date  on which  the participant
recognizes taxable  income  in respect  of  such shares.  Gain  or loss  upon  a
subsequent   sale  of  any  Common  Stock   received  upon  the  exercise  of  a
Non-Qualified Option generally would be taxed as capital gain or loss (long-term
or short-term, depending  upon the holding  period of the  stock sold).  Certain
additional  rules apply if the exercise price for a Non-Qualified Option is paid
in shares previously owned by the participant.

Subject to the applicable provisions of the Code and regulations thereunder,
the Company will generally be entitled to  an income tax deduction equal to  the
amount  of ordinary compensation income the participant recognizes in connection
with the exercise of any Non-Qualified  Option. The deduction will, in  general,
be  allowed  for  the taxable  year  of  the Company  in  which  the participant
recognizes such ordinary compensation income.

401(K) SAVINGS PLAN

On January 1, 1992,  the Company established the  Guess ? Inc. Savings  Plan
(the  "Savings Plan") under Section 401(k) of  the Code. Under the Savings Plan,
associates may contribute up  to 15% of their  compensation per year subject  to
the  elective limits  as defined by  guidelines of the  Internal Revenue Service
(the "IRS") and the  Company may make matching  contributions in amounts not  to
exceed  1.5% of the associates' annual compensation. The Company's contributions
to the Savings  Plan during the  years ended  December 31, 1993,  1994 and  1995
aggregated  $221,000, $213,000 and $261,000,  respectively. Contributions to the
Savings Plan during the first  quarters ended April 2,  1995 and March 31,  1996
aggregated $73,000 and $78,000, respectively.

52

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The  Company did not have a Compensation  Committee during 1995, but each of
Maurice, Paul and  Armand Marciano  (each of whom  also served  as an  executive
officer  of the  Company during  1995) participated  in deliberations concerning
executive  compensation.  See  "Certain  Transactions"  immediately  below   for
information regarding related-party transactions involving each of Maurice, Paul
and Armand Marciano.

53

CERTAIN TRANSACTIONS

The Company is engaged in various transactions with entities affiliated with
trusts  for the respective benefit of Maurice Marciano, Paul Marciano and Armand
Marciano (the  "Marciano  Trusts") and  the  other Principal  Stockholders.  The
Company  believes that each of the transactions discussed below was entered into
on terms no less favorable to the Company than could have been obtained from  an
unaffiliated third party.

DISTRIBUTION OF AIRCRAFT

As  a  part  of  the  S Corporation  Distribution,  the  Company  intends to
distribute an aircraft to the Principal Stockholders. The Principal Stockholders
have informed the Company of  their intention to dispose  of the aircraft to  be
distributed to them. Pending any such sale, the Company expects to enter into an
operating  lease of the aircraft to be distributed under which the Company would
remain responsible for the  expenses of operating  and maintaining the  aircraft
and would make nominal lease payments for the use thereof.

LICENSE ARRANGEMENTS AND LICENSEE TRANSACTIONS

On  January 1,  1995, the  Company entered  into a  licensing agreement with
Charles David of California ("Charles  David"). This new agreement superseded  a
prior  license agreement dated September  28, 1990 and amended  in May 1993. The
Marciano Trusts and Nathalie Marciano (the spouse of Maurice Marciano)  together
own 50% of Charles David, and the remaining 50% is owned by the father-in-law of
Maurice  Marciano.  The license  agreement grants  Charles  David the  rights to
manufacture worldwide and distribute worldwide (except Japan) men's, women's and
some children's leather and rubber footwear, excluding athletic footwear,  which
bear  the GUESS logo and trademark. The  license also includes related shoe care
products and  accessories. Gross  royalties  earned by  the Company  under  such
license  agreement for the fiscal years ended  December 31, 1993, 1994 and 1995,
and for the quarter ended March 31,  1996, was $1.7 million, $1.8 million,  $2.1
million  and $416,000, respectively. In the same respective periods, the Company
purchased $3.7 million, $4.8 million, $6.4 million and $1.2 million of  products
from Charles David for resale in the Company's retail stores.

On  September 1, 1994,  the Company entered into  a licensing agreement with
California Sunshine Active Wear, Inc.  ("California Sunshine"), granting it  the
rights to manufacture and distribute certain men's and women's activewear, which
bear  the GUESS logo  and trademark, in  the United States.  The Marciano Trusts
together own 51% of California Sunshine.  Gross royalties earned by the  Company
under  such license agreement for  the fiscal years ended  December 31, 1994 and
1995, and for the quarter ended March  31, 1996, was $0, $342,000 and  $103,000,
respectively. In the same respective periods, the Company purchased $0, $254,000
and  $68,000 of  products from California  Sunshine for resale  in the Company's
retail stores.

Effective January 1, 1995,  the Company entered  into a licensing  agreement
with  Guess Italia, S.r.l. ("Guess Italia"),  granting it the exclusive right in
Italy and  non-exclusive right  in  other parts  of  Europe to  manufacture  and
distribute  men's and women's  apparel and accessories that  bear the GUESS logo
and trademark. Guess  Italia is owned  79% by  the Company and  21% by  Marciano
International,  a company  wholly owned  by the  Marciano Trusts  that is  to be
merged into the Company as part of the Reorganization. Gross royalties earned by
the Company under such license agreement for the fiscal year ended December  31,
1995  and  for the  quarter  ended March  31,  1996 was  $505,000  and $333,000,
respectively. During 1993, 1994 and 1995  and the quarter ended March 31,  1996,
the  Company  purchased $0,  $0, $511,000  and $204,000  of products  from Guess
Italia for resale  in the retail  division's stores. The  Company sold $0,  $1.1
million,  $399,000 and  $73,000 of products  to Guess Italia  during 1993, 1994,
1995 and the quarter ended March 31, 1996, respectively.

During 1993 and 1994, the Company made advances to Guess Italia of  $193,199
and  $988,517,  respectively.  These  advances  were  subsequently  recorded  as
additional paid-in capital.

On December 1,  1992, the Company  entered into a  licensing agreement  with
Nantucket  Industries, Inc.  ("Nantucket Industries")  granting it  the right to
distribute and manufacture  men's and  women's innerwear, which  bear the  GUESS
logo  and trademark, in the United States. The Marciano Trusts together own 8.9%
of

54

Nantucket Industries. Gross royalties earned  by the Company under such  license
agreement  for the fiscal years ended December  31, 1993, 1994 and 1995, and for
the quarter ended March 31, 1996,  was $47,000, $214,000, $264,000 and  $80,000,
respectively.  In the  same respective  periods, the  Company purchased $23,000,
$201,000, $505,000 and $241,000 of products from Nantucket Industries for resale
in the Company's retail stores.

PURCHASING AGENCY AGREEMENT

On May 3, 1994, the Company entered  into an agreement with Ranche to  serve
as  a non-exclusive buying agent  for the Company in  Hong Kong, which agreement
was terminated in the first quarter of 1996 when certain of Ranche's assets were
transferred to  Newtimes Guess  Ltd., a  Hong Kong  corporation ("Newtimes")  in
which  the Marciano Trusts,  through their ownership  of Marciano International,
and the Company hold indirect ownership interests of 25% and 25%,  respectively.
Ranche  is currently a wholly owned subsidiary of GEBV. In the fiscal year ended
December 31,  1995, and  in the  quarter  ended March  31, 1996,  Ranche  earned
commission  income from the Company of  $1.3 million and $192,000, respectively,
in connection  with supplying  product.  In addition,  Ranche operates  under  a
licensing  arrangement to  distribute product to  authorized distributors. Gross
royalties earned by  the Company under  such license for  the fiscal year  ended
December  31, 1995, and for  the quarter ended March  31, 1996, was $240,000 and
$84,000, respectively.

In February 1996, the  Company entered into a  buying agency agreement  with
Newtimes.  Pursuant to  such agreement, the  Company pays  Newtimes a commission
based upon the price of all raw materials purchased for the Company by Newtimes.
As of  May 4,  1996, the  Company  had paid  Newtimes aggregate  commissions  of
$110,921.  In connection with the  Reorganization, the Marciano Trusts' indirect
interest in Newtimes will be transferred to the Company.

SALE/LEASEBACK TRANSACTION

On July 29, 1992, the Company  sold its corporate and distribution  facility
in Los Angeles to a limited partnership in which the sole partners were the then
existing  stockholders under a sale/leaseback arrangement. The facility was sold
for $24 million,  of which  $13 million  was received  in cash  upon closing  of
escrow. The balance of $11 million was paid by issuance of a promissory note due
in  July 1994.  The note  was repaid in  February 1993.  The limited partnership
obtained additional financing for  its purchase of the  facility through a  loan
from   an  institutional  third  party  lender.  The  loan  is  secured  by  the
partnership's interest  in the  facility  and in  the  lease with  the  Company.
Pursuant  to  the lease,  the Company  has agreed  to indemnify  the partnership
against certain losses  that may be  incurred in connection  with such loan.  In
August  1993, the partnership acquired and retired Georges Marciano's beneficial
interest in  such  partnership,  and  the  corporate  general  partner  in  such
partnership  redeemed Georges  Marciano's beneficial  interest in  the corporate
general partner.

LEASES

The Company leases  warehouse and administrative  facilities and one  retail
administrative  facility from partnerships affiliated  with the Marciano Trusts.
The leases will expire in July 2008. Aggregate lease payments under such  leases
for  the fiscal  years ended  December 31,  1993, 1994  and 1995  and the fiscal
quarter ended March 31, 1996 were  $2.1 million, $2.6 million, $2.8 million  and
$625,000, respectively.

LOANS TO EXECUTIVE OFFICERS

In  1995, the  Company loaned Mr.  Wallen the  sum of $200,000  at an annual
interest rate of  7% in connection  with certain moving  expenses. This loan  is
scheduled to be repaid in five annual installments commencing September 1, 1996.

In  1994, the Company loaned Mr. Williams  the sum of $400,000 in connection
with certain moving expenses. The loan has been repaid in full.

OTHER TRANSACTION

On December  31, 1993,  the  Company wrote  off  a current  note  receivable
(including  accrued interest) in the amount  of $521,000 from G&C Entertainment,
Inc. ("G&C"), a corporation engaged in television and

55

record production development. The Company  acquired its 51% interest in  equity
of  G&C in January 1993 from trusts for the benefit of Georges Marciano and Paul
Marciano who were  G&C's sole stockholders  prior to such  acquisition. G&C  was
dissolved in 1994.

STOCKHOLDERS' AGREEMENT

Prior  to consummation of the Offerings,  the Principal Stockholders and the
Company will amend and restate the Amended and Restated Shareholders'  Agreement
dated  November  12,  1993  (the  "Stockholders'  Agreement").  Pursuant  to the
Stockholders' Agreement, the  Principal Stockholders have  agreed to vote  their
shares  of Common Stock to  elect each of Maurice,  Paul and Armand Marciano, or
one designee of any such person (if such designee shall be reasonably acceptable
to  the  other  Principal   Stockholders)  to  the   Board  of  Directors.   The
Stockholders'  Agreement provides  that each  of the  Principal Stockholders has
granted to each other and to the Company rights of first refusal with respect to
the sale of any shares of  the Company's outstanding Common Stock (with  certain
limited exceptions).

PURCHASE AGREEMENT

On  August 23,  1993, the  Company repurchased 95%  of the  shares of Common
Stock then held by Georges  Marciano for a price of  $203.5 million and a  trust
for the benefit of Paul Marciano purchased the remaining 5% of such shares for a
price  of $10.7 million.  The purchase price  for such shares  was determined by
negotiation among the Company, the  Marciano Trusts and Georges Marciano.  Among
the  factors  considered in  determining the  purchase price  were the  past and
present operations of  the Company,  the prospects  for future  earnings of  the
Company  and other  relevant factors.  In connection  with such  repurchase, the
Company and the Marciano Trusts agreed to release and indemnify Georges Marciano
and the Georges Marciano Trust from  and against any claims relating to  certain
specified  matters, including the Company, its management, financing, operations
and personnel,  and the  offer and  sale of  the Company's  Senior  Subordinated
Notes.  Any  claim  for  such  indemnity  will  be  in  the  first  instance the
responsibility of the Company. As consideration for such indemnity and  release,
Georges  Marciano and  the Georges Marciano  Trust released the  Company and the
Marciano Trusts from any claim relating to certain specified matters,  including
the  Company, its  management, financing,  operations and  personnel (other than
certain excluded  matters).  In  addition, the  Company  canceled  the  existing
license  agreement between it and an  affiliate of Georges Marciano with respect
to the GEORGES MARCIANO-Registered  Trademark- trademarks, effective August  23,
1994,  and agreed to assign to such  affiliate all of the Company's right, title
and interest  in  the  GEORGES MARCIANO-Registered  Trademark-  trademarks,  but
reserved   the  right  to  use  such   trademarks  until  August  23,  1994.  As
consideration for such assignment, Georges  Marciano agreed to refrain from  any
use  of the GEORGES  MARCIANO-Registered Trademark- trademarks  until August 23,
1995.

56

PRINCIPAL STOCKHOLDERS

The  following table and the notes thereto  set forth information, as of the
date of this Prospectus,  relating to beneficial ownership  (as defined in  Rule
13d-3 of the Exchange Act) of the Company's equity securities and each Principal
Stockholder:

BENEFICIAL OWNERSHIP   BENEFICIAL OWNERSHIP
OF COMMON STOCK        OF COMMON STOCK
PRIOR TO THE            AFTER THE
OFFERINGS (1)          OFFERINGS (1)
--------------------   --------------------
NAME OF BENEFICIAL OWNERS                                                 NUMBER     PERCENT     NUMBER     PERCENT
- ----------------------------------------------------------------------  -----------  -------   -----------  -------

Maurice Marciano (2)..................................................               45.84%                      %
Paul Marciano (3).....................................................               36.43
Armand Marciano (4)...................................................               17.73
All directors and executive officers as a group
(7 persons)..........................................................               100.0%                      %

- ------------------------------
(1)  The address of  each person listed above  is c/o Guess  ?, Inc., 1444 South
Alameda Street, Los Angeles,  California 90021. Subject  to the Amended  and
Restated  Stockholders' Agreement dated                , 1996 and applicable
community property laws and similar laws, each person listed above has  sole
voting and investment power with respect to such shares.

(2)  Includes shares beneficially  owned or which  may be deemed  to be owned by
Maurice Marciano as follows:       shares as trustee of the Maurice Marciano
Trust under Trust dated February 24, 1986 with respect to which he has  sole
voting and investment power;       shares as co-trustee of the Paul Marciano
1996  Grantor Retained Annuity Trust with  respect to which he shares voting
and investment power; and       shares as co-trustee of the Armand  Marciano
1996  Grantor Retained Annuity Trust with  respect to which he shares voting
and investment power.

(3) Includes shares beneficially  owned or which  may be deemed  to be owned  by
Paul Marciano as follows:       shares as trustee of the Paul Marciano Trust
under Trust dated February 20, 1986 with respect to which he has sole voting
and investment power; and       shares as co-trustee of the Maurice Marciano
1996  Grantor Retained Annuity Trust with  respect to which he shares voting
and investment power.

(4) Includes shares beneficially  owned or which  may be deemed  to be owned  by
Armand  Marciano as trustee  of the Armand Marciano  Trust under Trust dated
February 20, 1986 with  respect to which he  has sole voting and  investment
power.

56

SHARES ELIGIBLE FOR FUTURE SALE

Upon  the consummation of the Offerings, the Company will have        shares
of Common Stock outstanding. Of these shares, the        shares of Common  Stock
sold  by  the  Company  in  the  Offerings  will  be  freely  tradeable  without
restriction or further registration under the Securities Act, unless held by  an
"affiliate"  of the Company (as that term  is defined below). Any such affiliate
will be  subject  to  the resale  limitations  of  Rule 144  adopted  under  the
Securities  Act. The remaining           shares of  Common Stock outstanding are
"restricted securities" for purposes of Rule 144 and are held by "affiliates" of
the Company within the meaning of Rule 144 under the Securities Act.  Restricted
securities  may not be resold in a public distribution except in compliance with
the registration requirements of the Securities Act or pursuant to an  exemption
therefrom,   including  the  exemption  provided  by  Rule  144.  The  Principal
Stockholders  have  contractual  rights  to  demand  or  participate  in  future
registrations of shares of Common Stock under the Securities Act.

In  general, under  Rule 144  as currently in  effect, a  person (or persons
whose shares are  aggregated), including a  person who  may be deemed  to be  an
"affiliate"  of the Company as that term is defined under the Securities Act, is
entitled to sell within any three  month period a number of shares  beneficially
owned  for at least two years that does not  exceed the greater of (i) 1% of the
then outstanding  shares of  Common Stock  or (ii)  the average  weekly  trading
volume  of the outstanding shares of Common Stock during the four calendar weeks
preceding  such  sale.  Sales  under  Rule  144  are  also  subject  to  certain
requirements  as to the manner  of sale, notice and  the availability of current
public information about the Company. However, a person (or persons whose shares
are aggregated) who  is not an  "affiliate" of  the Company during  the 90  days
preceding  a  proposed  sale  by  such person  and  who  has  beneficially owned
"restricted securities" for at least three years is entitled to sell such shares
under Rule  144  without  regard  to  the  volume,  manner  of  sale  or  notice
requirements.  As defined in Rule  144, an "affiliate" of  an issuer is a person
that directly or indirectly  controls, or is controlled  by, or is under  common
control with such issuer.

The  Company and the Principal Stockholders  have agreed, subject to certain
exceptions, not  to, directly  or  indirectly, (i)  sell,  grant any  option  to
purchase  or otherwise  transfer or  dispose of  any Common  Stock or securities
convertible into  or exchangeable  or exercisable  for Common  Stock or  file  a
registration statement under the Securities Act with respect to the foregoing or
(ii)  enter into any swap  or other agreement or  transaction that transfers, in
whole or in  part, the economic  consequence of ownership  of the Common  Stock,
without  the prior written  consent of Merrill  Lynch, for a  period of 180 days
after the date of this Prospectus.

Effective upon the  consummation of  the Offerings, the  Company intends  to
grant  options covering  approximately           shares  of its  Common Stock to
certain of its employees and non-employee directors pursuant to the 1996  Equity
Plan  and the Directors' Plan. Options covering  approximately    shares will be
exercisable immediately  following consummation  of  the Offerings.  After  such
grants,  an aggregate of approximately          shares will remain available for
future option grants and other equity awards under the 1996 Equity Plan and  the
Directors'  Plan. See  "Management -- 1996  Equity Incentive Plan"  and "-- 1996
Non-Employee Directors'  Stock  Option Plan."  The  Company intends  to  file  a
registration statement under the Securities Act to register all of the shares of
Common  Stock reserved  for issuance under  the 1996 Equity  Plan and Directors'
Plan. Such registration statement is expected to be filed as soon as practicable
after the date  of the Offerings  and will automatically  become effective  upon
filing.  Shares issued under the 1996 Equity  Plan and the Directors' Plan after
the registration statement is filed may  thereafter be sold in the open  market,
subject,  in the case of the various holders, to the Rule 144 volume limitations
applicable to affiliates and  any transfer restrictions imposed  on the date  of
the grant.

Prior  to the  Offerings, there  has been  no public  market for  the Common
Stock. No predictions can be  made of the effect, if  any, that future sales  of
shares  of Common Stock, and  options to acquire shares  of Common Stock, or the
availability of shares for future sale, will have on the market price prevailing
from time to time. Sales  of substantial amounts of  Common Stock in the  public
market,  or the  perception that  such sales  may occur,  could have  a material
adverse effect on the  market price of  the Common Stock.  See "Risk Factors  --
Future Sales by Principal Stockholders; Shares Eligible for Future Sale."

57

DESCRIPTION OF CAPITAL STOCK

The  following summary  description of the  capital stock of  the Company is
qualified in its entirety  by reference to the  form of Restated Certificate  of
Incorporation  of the Company (the "Restated  Certificate") and form of Restated
Bylaws of the Company,  a copy of each  of which is filed  as an exhibit to  the
Registration Statement of which this Prospectus forms a part.

The  authorized capital stock of  the Company consists of          shares of
Common Stock, par value $.01 per  share, and         shares of Preferred  Stock,
par value $.01 per share (the "Preferred Stock") par value.

COMMON STOCK

Holders  of Common Stock are entitled to one vote for each share held on all
matters submitted  to a  vote of  the shareholders,  including the  election  of
directors.  Accordingly, holders  of a  majority of  the shares  of Common Stock
entitled to vote in  any election of  directors may elect  all of the  directors
standing  for election. The Restated Certificate does not provide for cumulative
voting in  the  election  of  directors. Subject  to  preferences  that  may  be
applicable  to any  Preferred Stock outstanding  at the time,  holders of Common
Stock are entitled to receive ratably such dividends, if any, as may be declared
from time to  time by  the Board  of Directors  out of  funds legally  available
therefor.  See "Dividend Policy." In the  event of a liquidation, dissolution or
winding up of the Company, holders of Common Stock are entitled to share ratably
in all  assets remaining  after payment  of the  Company's liabilities  and  the
liquidation  preference, if any,  of any outstanding  shares of Preferred Stock.
Holders of Common Stock have no preemptive rights and no rights to convert their
Common Stock into any  other securities and there  are no redemption  provisions
with  respect to such shares. All of  the outstanding shares of Common Stock are
fully paid and non-assessable. The rights, preferences and privileges of holders
of Common Stock are subject to, and may be adversely affected by, the rights  of
the  holders of shares  of any series  of Preferred Stock  which the Company may
designate and issue in the future.

At present there is no established trading market for the Common Stock.  The
Company has applied to have the Common Stock listed on the NYSE.

The    transfer   agent   and   registrar    for   the   Common   Stock   is
.

PREFERRED STOCK

The Restated  Certificate  provides that  the  Board of  Directors,  without
further  action by the stockholders, may issue  shares of the Preferred Stock in
one or more series and may fix or alter the relative, participating, optional or
other rights,  preferences, privileges  and restrictions,  including the  voting
rights,  redemption  provisions  (including sinking  fund  provisions), dividend
rights, dividend rates, liquidation preferences  and conversion rights, and  the
description  of and number of shares  constituting any wholly unissued series of
Preferred Stock. The Board of  Directors, without further stockholder  approval,
can  issue  Preferred  Stock  with  voting  and  conversion  rights  which could
adversely affect the voting power of the  holders of Common Stock. No shares  of
Preferred Stock presently are outstanding and the Company currently has no plans
to  issue shares of Preferred Stock. The  issuance of Preferred Stock in certain
circumstances may have the effect of delaying or preventing a change of  control
of  the Company without further action  by the stockholders, may discourage bids
for the Company's Common Stock at a premium over the market price of the  Common
Stock  and may adversely affect the market price and the voting and other rights
of the holders of Common Stock.

CERTAIN CERTIFICATE OF INCORPORATION, BYLAWS AND STATUTORY PROVISIONS AFFECTING
STOCKHOLDERS

SPECIAL MEETING OF STOCKHOLDERS; STOCKHOLDER ACTION BY WRITTEN CONSENT.  The
Restated Certificate provides that any action required or permitted to be  taken
by the Company's stockholders may be effected at a duly called annual or special
meeting  of  stockholders  or  by written  consent.  Additionally,  the Restated
Certificate and Bylaws provide that special meetings of the stockholders of  the
Company  may  be called  only by  a majority  of  the Board  of Directors  or an
authorized committee thereof.

58

ADVANCE  NOTICE  REQUIREMENTS   FOR  STOCKHOLDER   PROPOSALS  AND   DIRECTOR
NOMINATIONS.   The Company's  Bylaws provide that  stockholders seeking to bring
business before or to  nominate directors at any  meeting of stockholders,  must
provide  timely notice thereof in writing.  To be timely, a stockholder's notice
must be delivered to, or mailed and received at, the principal executive offices
of the Company not less than (i) with respect to an annual meeting, 120 calendar
days in advance of the date that  the Company's proxy statement was released  to
stockholders  in connection with the previous year's annual meeting, except that
if no annual meeting was held in the previous year or if the date of the  annual
meeting  has  been  changed  by  more  than  30  calendar  days  from  the  date
contemplated at the  time of the  previous year's proxy  statement, such  notice
must  be received by  the Company a  reasonable time before  the Company's proxy
statement is  to be  released and  (ii) with  respect to  a special  meeting  of
stockholders,  a reasonable time  before the Company's proxy  statement is to be
released. The  Bylaws  also specify  certain  requirements for  a  stockholder's
notice  to  be  in  proper  written form.  These  provisions  may  preclude some
stockholders from  bringing  matters  before the  stockholders  or  from  making
nominations for directors.

DIRECTOR AND OFFICER INDEMNIFICATION.  The Delaware Corporation Law provides
that   a  Delaware  corporation  may  include  provisions  in  its  articles  of
incorporation relieving each of its directors of monetary liability arising  out
of  his or her  conduct as a  director for breach  of his or  her fiduciary duty
except liability for (i) any  breach of such director's  duty of loyalty to  the
corporation  or its stockholders,  (ii) acts or  omissions that are  not in good
faith or involve  intentional misconduct or  a knowing violation  of law,  (iii)
conduct  violating Section  174 of the  Delaware Corporation  Law (which section
relates to unlawful distributions) or (iv) any transaction from which a director
derived  an  improper  personal  benefit.  The  Company's  Restated  Certificate
includes such provisions.

The  Company's  Restated Certificate  and  Bylaws provide  that  the Company
shall, to  the fullest  extent permitted  by the  Delaware Corporation  Law,  as
amended  from  time to  time,  indemnify and  advance  expenses to  each  of its
currently acting and  former directors and  officers, and may  so indemnify  and
advance  expenses to each  of its current  and former employees  and agents. The
Company believes the foregoing  provisions are necessary  to attract and  retain
qualified  persons as directors  and officers. Prior to  the consummation of the
Offerings, the Company intends to enter into separate indemnification agreements
with each of its  directors and executive officers  in order to effectuate  such
provisions.

59

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The  following is a general discussion  of certain United States Federal tax
consequences of the acquisition, ownership, and disposition of Common Stock by a
holder that, for  United States Federal  income tax purposes,  is not a  "United
States person" (a "Non-United States Holder"). This discussion is based upon the
United  States  Federal tax  law  now in  effect,  which is  subject  to change,
possibly retroactively.  For  purposes  of this  discussion,  a  "United  States
person"  means a  citizen or  resident of  the United  States; a  corporation, a
partnership, or other entity created or organized in the United States or  under
the  laws of the  United States or  of any political  subdivision thereof; or an
estate or trust  whose income is  includible in gross  income for United  States
Federal  income tax purposes regardless of  its source. This discussion does not
consider any specific  facts or  circumstances that  may apply  to a  particular
Non-United  States Holder. Prospective investors are  urged to consult their tax
advisors regarding  the United  States Federal  tax consequences  of  acquiring,
holding, and disposing of Common Stock, as well as any tax consequences that may
arise under the laws of any foreign, state, local, or other taxing jurisdiction.

DIVIDENDS

Dividends  paid to a  Non-United States Holder will  generally be subject to
withholding of United  States Federal income  tax at the  rate of 30%  (or at  a
reduced  tax treaty rate), unless the dividend is effectively connected with the
conduct of a trade or business within the United States by the Non-United States
Holder, in which case the dividend will be subject to the United States  Federal
income tax on net income on the same basis that applies to United States persons
generally.  In the case  of a Non-United  States Holder which  is a corporation,
such effectively connected income also may be subject to the branch profits tax.
Non-United States  Holders  should consult  their  tax advisors  concerning  any
applicable  income tax treaties that may provide for a lower rate of withholding
or other rules different from those described above. A Non-United States  Holder
will,  if  certain proposed  regulations become  final,  be required  to satisfy
certain  certification  requirements  in  order  to  claim  treaty  benefits  or
otherwise claim a reduction of or exemption from withholding under the foregoing
rules.

GAIN ON DISPOSITION

A  Non-United States Holder  will generally not be  subject to United States
Federal income tax on gain recognized on  a sale or other disposition of  Common
Stock  unless (i) the gain is effectively  connected with the conduct of a trade
or business within the  United States by the  Non-United States Holder, (ii)  in
the case of a Non-United States Holder who is a nonresident alien individual and
holds  the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in  the taxable year of disposition and either  such
individual  has a "tax home" in the United States or the gain is attributable to
an office or other fixed place of business maintained by such individual in  the
United  States or (iii) the Company is or has been a "U.S. real property holding
corporation" for United States  Federal income tax  purposes (which the  Company
does  not believe that it  is or is likely to  become). Gain that is effectively
connected with the conduct of  a trade or business  within the United States  by
the Non-United States Holder will be subject to the United States Federal income
tax  on  net income  on the  same basis  that applies  to United  States persons
generally (and, with respect to corporate holders, under certain  circumstances,
the  branch  profits tax)  but will  not be  subject to  withholding. Non-United
States Holders should consult their  own tax advisors concerning any  applicable
treaties that may provide for different rules.

FEDERAL ESTATE TAXES

Common Stock owned or treated as owned by an individual who is not a citizen
or  resident (for United States estate tax purposes) of the United States at the
date of death  will be included  in such individual's  estate for United  States
Federal  estate tax  purposes, unless an  applicable estate  tax treaty provides
otherwise.

60

INFORMATION REPORTING AND BACKUP WITHHOLDING

The Company generally must report  annually to the Internal Revenue  Service
and  to each Non-United States  Holder the amount of  dividends paid to, and the
tax withheld with  respect to, such  holder, regardless of  whether any tax  was
actually  withheld.  This information  may  also be  made  available to  the tax
authorities of a country in which the Non-United States Holder resides.

Under  temporary   United  States   Treasury  regulations,   United   States
information reporting requirements and backup withholding tax will generally not
apply  to dividends paid on the Common Stock to a Non-United States Holder at an
address outside  the United  States. Payments  by a  United States  office of  a
broker  of the proceeds of a sale of  the Common Stock is subject to both backup
withholding at  a  rate of  31%  and  information reporting  unless  the  holder
certifies  its Non-United  States Holder  status under  penalties of  perjury or
otherwise establishes an exemption. Information reporting requirements (but  not
backup  withholding) will also apply to payments of the proceeds of sales of the
Common Stock by  foreign offices of  United States brokers,  or foreign  brokers
with  certain types of relationships to the United States, unless the broker has
documentary evidence  in its  records that  the holder  is a  Non-United  States
Holder and certain other conditions are met, or the holder otherwise establishes
an exemption.

Backup  withholding is not an additional tax. Any amounts withheld under the
backup withholding rules  will be  refunded or credited  against the  Non-United
States  Holder's United States  Federal income tax  liability, provided that the
required information is furnished to the Internal Revenue Service.

PROPOSED REGULATIONS

Under current  United  States Treasury  regulations,  dividends paid  to  an
address  in a  foreign country  are presumed to  be paid  to a  resident of that
country (unless the  payor has knowledge  to the contrary)  for purposes of  the
withholding  discussed  above and,  under the  current interpretation  of United
States Treasury regulations, for purposes of determining the applicability of  a
tax treaty rate. Under recently proposed United States Treasury regulations that
are  proposed to  be effective  for payments made  after December  31, 1997 (the
"Proposed Regulations"), however, a Non-United States Holder of Common Stock who
wishes to claim the benefit  of an applicable treaty  rate would be required  to
satisfy  applicable certification requirements.  Under the Proposed Regulations,
dividend payments would also be made subject to information reporting and backup
withholding unless these applicable certification requirements are satisfied. In
addition, under the Proposed Regulations, in the case of Common Stock held by  a
foreign  partnership,  (x)  the  certification  requirement  would  generally be
applied to the  partners of  the partnership and  (y) the  partnership would  be
required  to  provide certain  information, including  a United  States taxpayer
identification number. The Proposed Regulations also provide look-through  rules
for tiered partnerships. There can be no assurance that the Proposed Regulations
will  be adopted  or as  to the provisions  that they  will include  if and when
adopted in temporary or final form.

61

UNDERWRITING

Subject  to the terms and conditions set  forth in a purchase agreement (the
"U.S. Purchase Agreement") among the Company and each of the underwriters  named
below  (the "U.S.  Underwriters"), and concurrently  with the  sale of 1,840,000
shares of Common  Stock to the  International Managers (as  defined below),  the
Company  has agreed to  sell to each of  the U.S. Underwriters,  and each of the
U.S. Underwriters severally has agreed to purchase from the Company, the  number
of shares of Common Stock set forth opposite its name below.

NUMBER
U.S. UNDERWRITERS                                              OF SHARES
-----------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................
Morgan Stanley & Co. Incorporated.....................................
-----------
Total.......................................................    7,360,000
-----------
-----------

Merrill  Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co.
Incorporated are acting as representatives  (the "U.S. Representatives") of  the
U.S. Underwriters.

The  Company has also entered into  a purchase agreement (the "International
Purchase  Agreement"  and,  together  with  the  U.S.  Purchase  Agreement,  the
"Purchase  Agreements") with certain underwriters  outside the United States and
Canada (collectively, the "International Managers,"  and together with the  U.S.
Underwriters,  the  "Underwriters"), for  whom  Merrill Lynch  International and
Morgan Stanley & Co. International Limited are acting as representatives of  the
International  Managers (the "International  Representatives" and, together with
the U.S.  Representatives,  the "Representatives").  Subject  to the  terms  and
conditions  set forth in the  International Purchase Agreement, and concurrently
with the  sale of  7,360,000 shares  of Common  Stock to  the U.S.  Underwriters
pursuant  to the U.S. Purchase Agreement, the  Company has agreed to sell to the
International Managers and the International  Managers have severally agreed  to
purchase from the Company, an aggregate of 1,840,000 shares of Common Stock. The
initial  public offering  price per share  of Common Stock  and the underwriting
discount per  share  of Common  Stock  are  identical under  the  U.S.  Purchase
Agreement and the International Purchase Agreement.

In the U.S. Purchase Agreement and the International Purchase Agreement, the
several  U.S. Underwriters and the several International Managers, respectively,
have agreed, subject to the terms and conditions set forth therein, to  purchase
all  of the shares of Common Stock being sold pursuant to each such Agreement if
any of the  shares of Common  Stock being  sold pursuant to  such Agreement  are
purchased.  Under certain circumstances, the  commitments of non-defaulting U.S.
Underwriters or International Managers  (as the case may  be) may be  increased.
The  purchase of shares of Common Stock  by the U.S. Underwriters is conditioned
upon the purchase of shares of  Common Stock by the International Managers,  and
vice versa.

The  U.S. Underwriters and  the International Managers  have entered into an
intersyndicate agreement  (the  "Intersyndicate Agreement")  providing  for  the
coordination of their activities. The Underwriter's are permitted to sell shares
of  Common Stock  to each  other for  purposes of  resale at  the initial public
offering price, less an  amount not greater than  the selling concession.  Under
the  terms of the Intersyndicate Agreement, the U.S. Underwriters and any dealer
to whom they sell shares of Common Stock  will not offer to sell or sell  shares
of  Common  Stock to  persons who  are  non-U.S. or  non-Canadian persons  or to
persons  they  believe  intend  to  resell  to  persons  who  are  non-U.S.   or
non-Canadian persons, and the International Managers and any dealer to whom they
sell  shares of  Common Stock will  not offer to  sell or sell  shares of Common
Stock to U.S. persons or to Canadian  persons or to persons they believe  intend
to  resell  to  U.S.  persons  or  Canadian  persons,  except  in  the  case  of
transactions pursuant to the Intersyndicate Agreement.

62

The U.S. Representatives have advised the Company that the U.S. Underwriters
propose initially to  offer the  shares of  Common Stock  to the  public at  the
initial  public offering price set  forth on the cover  page of this Prospectus,
and to certain dealers at such price less a concession not in excess of $    per
share  of Common Stock on sales to  certain other dealers. The U.S. Underwriters
may allow, and such  dealers may reallow, a  discount not in excess  of $    per
share  of Common  Stock on  sales to  certain other  dealers. After  the initial
public offering,  the public  offering  price, concession  and discount  may  be
changed.

At  the request of  the Company, the  U.S. Underwriters have  reserved up to
750,000 shares of Common Stock for sale at the initial public offering price  to
directors,  officers, employees, business associates  and related persons of the
Company. The number of shares of Common Stock available for sale to the  general
public will be reduced to the extent such persons purchase such reserved shares.
Any  reserved  shares  which  are  not  so  purchased  will  be  offered  by the
Underwriters to the general public on the same basis as the other shares offered
hereby. Certain individuals purchasing reserved shares may be required to  agree
not  to sell,  offer or otherwise  dispose of any  shares of Common  Stock for a
period of three months after the date of this Prospectus.

The Company,the Principal Stockholders  and certain executive officers  have
agreed, subject to certain exceptions, not to, directly or indirectly, (i) sell,
grant  any option  to purchase  or otherwise transfer  or dispose  of any Common
Stock or securities convertible into  or exchangeable or exercisable for  Common
Stock  or file a registration statement under the Securities Act with respect to
the foregoing or (ii) enter into any swap or other agreement or transaction that
transfers, in whole  or in part,  the economic consequence  of ownership of  the
Common  Stock, without the prior written consent  of Merrill Lynch, for a period
of 180 days after the date of this Prospectus.

The Company  has granted  an option  to the  U.S. Underwriters,  exercisable
within 30 days after the date of this Prospectus, to purchase up to an aggregate
of  1,104,000 additional shares  of Common Stock at  the initial public offering
price set forth  on the  cover page of  this Prospectus,  less the  underwriting
discount.  The  U.S.  Underwriters  may  exercise  this  option  only  to  cover
over-allotments, if any, made on the sale of the Common Stock offered hereby. To
the  extent  that  the  U.S.  Underwriters  exercise  this  option,  each   U.S.
Underwriter  will be  obligated, subject  to certain  conditions, to  purchase a
number  of  additional  shares  of  Common  Stock  proportionate  to  such  U.S.
Underwriter's  initial amount reflected in the foregoing table. The Company also
has granted an option to the International Managers, exercisable within 30  days
after  the date of  this Prospectus, to  purchase up to  an aggregate of 276,000
additional shares of  Common Stock to  cover over-allotments, if  any, on  terms
similar to those granted to the U.S. Underwriters.

Prior  to the Offerings, there  has been no public  market for the shares of
Common Stock  of  the  Company.  The initial  public  offering  price  has  been
determined  through negotiations  between the  Company and  the Representatives.
Among the factors considered in  determining the initial public offering  price,
in  addition  to  prevailing  market conditions,  are  price-earnings  ratios of
publicly traded companies that the  Representatives believe to be comparable  to
the  Company, certain financial information of  the Company, the history of, and
the prospects  for,  the Company  and  the industry  in  which it  competes,  an
assessment  of the  Company's management, its  past and  present operations, the
prospects for, and timing of, future revenues of the Company, the present  state
of the Company's development, and the above factors in relation to market values
and  valuation measures of other companies  engaged in activities similar to the
Company. There can be  no assurance that an  active trading market will  develop
for  the Common Stock or  that the Common Stock will  trade in the public market
subsequent to the Offerings at or above the initial public offering price.

The Underwriters do not intend to confirm sales of the Common Stock  offered
hereby to any accounts over which they exercise discretionary authority.

The  Company and  the Principal  Stockholders have  agreed to  indemnify the
several Underwriters against  certain liabilities,  including liabilities  under
the  Securities  Act,  or to  contribute  to  payments the  Underwriters  may be
required to make in respect thereof.

63

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for  the
Company  by Shearman & Sterling, Los  Angeles, California. Certain legal matters
relating to the Offerings will be  passed upon for the Underwriters by  Skadden,
Arps,  Slate, Meagher &  Flom, Los Angeles, California.  Shearman & Sterling has
from time to  time represented certain  of the Underwriters  in connection  with
unrelated  legal matters. Skadden, Arps, Slate, Meagher  & Flom has from time to
time represented the Company in connection with unrelated legal matters.

EXPERTS

The consolidated financial statements and  schedule of Guess as of  December
31,  1994 and 1995,  and for each  of the years  in the three  year period ended
December 31, 1995, have been included  herein and in the registration  statement
in  reliance upon  the report  of KPMG  Peat Marwick  LLP, independent certified
public accountants appearing elsewhere  herein, and upon  the authority of  said
firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the Exchange Act
and,  in  accordance therewith,  files reports  and  other information  with the
Securities and Exchange Commission. Such reports and other information filed  by
the  Company  may be  inspected without  charge at  the Securities  and Exchange
Commission's principal office in Washington, D.C., and at the following regional
offices of the Commission: Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and  at Seven World Trade  Center, Suite 1300,  New
York, New York 10048. Copies of all or any part thereof may be obtained from the
Public  Reference Section, Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 upon payment  of the prescribed fees. Upon  listing
of  the Common Stock on the NYSE, such reports and other information can also be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
In addition, the Commission maintains a World  Wide Web site on the Internet  at
http://  www.sec.gov that contains reports, proxy and information statements and
other information  regarding  registrants  that  file  electronically  with  the
Commission.

The  Company  has  filed  with  the  Securities  and  Exchange  Commission a
Registration Statement on Form S-1 under the Securities Act with respect to  the
Common  Stock  offered  hereby. This  Prospectus  does  not contain  all  of the
information set  forth  in  the  Registration Statement  and  the  exhibits  and
schedules  thereto. For further information with  respect to the Company or such
Common Stock, reference is made to the Registration Statement and the  schedules
and  exhibits filed as  a part thereof. Statements  contained in this Prospectus
regarding the contents of any contract or any other document are not necessarily
complete and, in each  instance, reference is  hereby made to  the copy of  such
contract  or other document filed as  an exhibit to such Registration Statement.
The Registration Statement, including exhibits thereto, may be inspected without
charge office of the  Securities and Exchange Commission.  Copies of all or  any
part thereof may be obtained upon payment of the prescribed fees.

The  Company  intends  to  furnish  its  stockholders  with  annual  reports
containing  financial  statements  audited   by  independent  certified   public
accountants   and   with  quarterly   reports  containing   unaudited  financial
information for each of the first three quarters of each fiscal year.

64

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Independent Auditors' Report....................................................     F-2

Consolidated Balance Sheets at December 31, 1994, 1995 (audited) and March 31,
1996 and pro forma March 31, 1996 (unaudited)..................................     F-3

Consolidated Statements of Earnings for the Years Ended December 31, 1993, 1994,
1995 (audited) and the first quarters ended April 2, 1995 and March 31, 1996
(unaudited)....................................................................     F-4

Consolidated Statements of Stockholders' Equity for the Years Ended December 31,
1993, 1994, 1995 (audited) and first quarters ended April 2, 1995 and March 31,
1996 (unaudited)...............................................................     F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 1993,
1994, 1995 (audited) and first quarters ended April 2, 1995 and March 31, 1996
(unaudited)....................................................................     F-6

Notes to Consolidated Financial Statements......................................     F-7

F-1

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Guess ?, Inc.:

We  have audited the accompanying consolidated financial statements of Guess
?, Inc. and Subsidiaries as listed in the accompanying index. These consolidated
financial statements are  the responsibility  of the  Company's management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted  our  audits in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence  supporting
the  amounts and disclosures in the financial statements. An audit also includes
assessing the  accounting  principles used  and  significant estimates  made  by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion, the  consolidated financial  statements referred  to  above
present  fairly, in  all material respects,  the financial position  of Guess ?,
Inc. and Subsidiaries as of December 31, 1994 and 1995 and the results of  their
operations  and their cash flows for each  of the years in the three-year period
ended December  31,  1995  in  conformity  with  generally  accepted  accounting
principles.

KPMG PEAT MARWICK LLP

Los Angeles, California
March 1, 1996

F-2

GUESS ?, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1995, MARCH 31, 1996 AND PRO FORMA MARCH 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

PRO FORMA
MARCH 31,
MARCH 31,    1996 (NOTE
1994        1995        1996          1)
----------  ----------  ----------  ------------
(UNAUDITED)

Current assets:
Cash...........................................................  $    5,994  $    6,417  $    8,583   $    8,583
Receivables:
Trade receivables, net of reserves aggregating, $10,391,
$10,849 and $7,563 at December 31, 1994 and 1995 and March
31, 1996, respectively......................................      23,505      22,886      43,005       43,005
Royalties....................................................       9,728       9,975       9,540        9,540
Other........................................................       5,267       4,040       3,163        3,163
----------  ----------  ----------  ------------
38,500      36,901      55,708       55,708
Inventories (note 3)...........................................      83,772      72,889      90,472       90,472
Prepaid expenses...............................................       4,837       5,557       5,508        5,508
Deferred tax assets (note 1)...................................      --          --          --            4,408
----------  ----------  ----------  ------------
Total current assets.......................................     133,103     121,764     160,271      164,679

Property and equipment, at cost, net of accumulated depreciation
and amortization (note 4).......................................      59,725      68,199      66,528       66,528
Long-term investments (note 2)...................................       3,136       3,394       3,404        3,404
Deferred tax assets (note 1).....................................      --          --          --            2,929
Other assets, at cost, net of accumulated amortization of $1,800
and $2,279, $2,361 at December 31, 1994 and 1995 and March 31,
1996, respectively (note 7).....................................      11,732       9,278       9,064        9,064
----------  ----------  ----------  ------------
$  207,696  $  202,635  $  239,267   $  246,604
----------  ----------  ----------  ------------
----------  ----------  ----------  ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of notes payable and long-term debt (notes
5 and 7)......................................................  $    4,696  $    4,123  $    5,756   $    5,756
Accounts payable...............................................      29,840      40,701      43,739       43,739
Accrued expenses...............................................      14,431      18,332      14,978       14,978
Income taxes payable (note 6)..................................       1,009       1,036       1,928        1,928
S corporation distribution notes (note 1)......................      --          --          --          180,800
----------  ----------  ----------  ------------
Total current liabilities..................................      49,976      64,192      66,401      247,201

Notes payable and long-term debt, net of current installments

(notes 5 and 7).................................................     151,799     119,212     146,752      146,752
Minority interest................................................          53          75         417          417
Other liabilities................................................       5,495       8,159       8,227        8,227
----------  ----------  ----------  ------------
207,323     191,638     221,797      402,597
Stockholders' equity (notes 1, 7 and 13):
Preferred stock, $    par value. Authorized         shares; no
shares issued and outstanding.................................      --          --          --           --
Common stock, $.01 par value. Authorized 2,000,000 shares;
issued 1,613,750, outstanding 1,000,525, 613,225 shares held
in Treasury...................................................          35          35          35           35
Paid-in capital................................................         181         181         181      (12,605)
Retained earnings..............................................     150,948     161,567     168,014        7,337
Foreign currency translation adjustment........................         (15)        (10)         16           16
Treasury stock, 613,225 shares repurchased.....................    (150,776)   (150,776)   (150,776)    (150,776)
----------  ----------  ----------  ------------
Net stockholders' equity (deficiency)........................         373      10,997      17,470     (155,993)
Commitments, contingencies and subsequent events (notes 5, 9 and
13).............................................................
----------  ----------  ----------  ------------
$  207,696  $  202,635  $  239,267   $  246,604
----------  ----------  ----------  ------------
----------  ----------  ----------  ------------

See accompanying notes to consolidated financial statement

F-3

GUESS ?, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND FIRST QUARTERS ENDED APRIL 2, 1995 AND MARCH 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)

APRIL 2,    MARCH 31,
1993       1994       1995       1995        1996
---------  ---------  ---------  ---------  -----------
(UNAUDITED)

Net revenue:
Product sales..........................................  $ 491,444  $ 507,462  $ 440,359  $ 113,646   $ 123,275
Net royalties..........................................     28,780     40,350     46,374     11,257      11,623
---------  ---------  ---------  ---------  -----------
520,224    547,812    486,733    124,903     134,898
Cost of sales (note 8)...................................    260,409    291,989    262,142     65,267      70,479
---------  ---------  ---------  ---------  -----------
Gross profit.............................................    259,815    255,823    224,591     59,636      64,419
Selling, general and administrative expenses (note 8)....    145,351    138,016    141,663     34,160      35,232
---------  ---------  ---------  ---------  -----------
Earnings from operations...............................    114,464    117,807     82,928     25,476      29,187

Non-operating income (expense):
Interest, net..........................................    (11,735)   (16,948)   (15,957)    (4,041)     (3,549)
Other, net.............................................      2,552        322       (157)      (164)       (320)
---------  ---------  ---------  ---------  -----------
(9,183)   (16,626)   (16,114)    (4,205)     (3,869)

Earnings before income taxes...........................    105,281    101,181     66,814     21,271      25,318

Income taxes (note 6)....................................      1,810      3,540      2,895        559       1,271
---------  ---------  ---------  ---------  -----------
Net earnings...........................................  $ 103,471  $  97,641  $  63,919  $  20,712   $  24,047
---------  ---------  ---------  ---------  -----------
---------  ---------  ---------  ---------  -----------

Supplemental pro forma financial information (note 1):
Earnings before income taxes, as presented...............  $ 105,281  $ 101,181  $  66,814  $  21,271   $  25,318
Pro forma provision for income taxes (unaudited).........     42,112     40,472     26,726      8,508      10,127
---------  ---------  ---------  ---------  -----------
Pro forma net earnings (unaudited).......................  $  63,169  $  60,709  $  40,088  $  12,763   $  15,191
---------  ---------  ---------  ---------  -----------
---------  ---------  ---------  ---------  -----------
Pro forma net earnings per share.........................                        $                      $
Weighted average common shares outstanding...............
---------             -----------
---------             -----------

See accompanying notes to consolidated financial statements

F-4

GUESS ?, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND THE FIRST QUARTER ENDED MARCH 31, 1996
(IN THOUSANDS)

FOREIGN
CURRENCY
COMMON        PAID-IN     RETAINED    TRANSLATION    TREASURY
STOCK        CAPITAL     EARNINGS    ADJUSTMENT      STOCK       TOTAL
-------------  -----------  ----------  -------------  ----------  ----------

Balance at December 31, 1992................    $      35     $     181   $  167,174    $  --        $   --      $  167,390
Net earnings..............................       --            --          103,471       --            --         103,471
Stockholder distributions.................       --            --         (117,656)      --            --        (117,656)
Foreign currency translation adj..........       --            --           --              (31)       --             (31)
Repurchase of treasury stock..............       --            --          (52,682)      --          (150,776)   (203,458)
---         -----   ----------          ---    ----------  ----------
Balance at December 31, 1993................           35           181      100,307          (31)     (150,776)    (50,284)
Net earnings..............................       --            --           97,641       --            --          97,641
Stockholder distributions.................       --            --          (47,000)      --            --         (47,000)
Foreign currency translation adj..........       --            --           --               16        --              16
---         -----   ----------          ---    ----------  ----------
Balance at December 31, 1994................           35           181      150,948          (15)     (150,776)        373
Net earnings..............................       --            --           63,919       --            --          63,919
Stockholder distributions.................       --            --          (53,300)      --            --         (53,300)
Foreign currency translation adj..........       --            --           --                5        --               5
---         -----   ----------          ---    ----------  ----------
Balance at December 31, 1995................           35           181      161,567          (10)     (150,776)     10,997
Net earnings (unaudited)..................       --            --           24,047       --            --          24,047
Stockholder distributions
(unaudited)..............................       --            --          (17,600)      --            --         (17,600)
Foreign currency translation adj.
(unaudited)..............................       --            --           --               26        --              26
---         -----   ----------          ---    ----------  ----------
Balance at March 31, 1996
(unaudited)................................    $      35     $     181   $  168,014    $      16    $ (150,776) $   17,470
---         -----   ----------          ---    ----------  ----------
---         -----   ----------          ---    ----------  ----------

See accompanying notes to consolidated financial statement

F-5

GUESS ?, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995 AND FIRST QUARTERS ENDED
APRIL 2, 1995 AND MARCH 31, 1996 (IN THOUSANDS)

APRIL 2,    MARCH 31,
1993       1994       1995       1995        1996
---------  ---------  ---------  ---------  -----------
(UNAUDITED)

Cash flows from operating activities:
Net earnings..............................................  $ 103,471  $  97,641  $  63,919  $  20,712   $  24,047
Adjustments to reconcile net earnings to net cash provided
by (used in) operating activities:
Depreciation and amortization of property and
equipment..............................................     10,322     12,070     14,277      3,326       4,282
Amortization of deferred charges........................        251        515      1,373        496         247
(Gain) loss on disposition of property and equipment....       (223)       726        814        247          16
Foreign currency translation adjustment.................        (31)        (5)       (14)        28          15
Contributions from minority interest....................         29         24         22         31         342
Undistributed equity method earnings....................     --            (72)      (117)       (46)         (9)
(Increase) decrease in:
Receivables...........................................     46,708    (14,628)     1,599    (12,748)    (18,807)
Inventories...........................................    (20,357)    (3,353)    10,884     10,795     (17,583)
Prepaid expenses......................................       (245)    (1,516)      (720)        74          49
Other assets..........................................     (1,620)       180      1,858        112          85
Increase (decrease) in:
Accounts payable......................................     (9,259)     8,043     10,861     (6,536)      3,038
Accrued expenses......................................      1,303     (1,337)     3,658     (3,084)     (3,416)
Income taxes payable..................................     (2,380)       795         22        475         892
---------  ---------  ---------  ---------  -----------
Net cash provided by (used in) operating
activities.........................................    127,969     99,083    108,436     13,882      (6,802)
---------  ---------  ---------  ---------  -----------
Cash flows from investing activities:
Net decrease in short-term investments....................     22,782      5,000     --         --          --
Purchases of property and equipment.......................    (14,965)   (19,779)   (23,757)    (5,479)     (2,629)
Proceeds from the disposition of property and equipment...      2,425        172        192         11           2
Lease incentives granted..................................      1,573      1,503      2,015        305          11
Purchase of long-term investments.........................     --         (3,136)       (23)      (122)     --
---------  ---------  ---------  ---------  -----------
Net cash provided by (used in) investing
activities.........................................     11,815    (16,240)   (21,573)    (5,285)     (2,616)
---------  ---------  ---------  ---------  -----------
Cash flows from financing activities:
Proceeds from notes payable and long-term debt............    280,520    222,040    131,193     36,743      55,857
Proceeds from Bridge Loan.................................     80,000     --         --         --          --
Repayment of notes payable and long-term debt.............    (99,655)  (254,959)  (164,353)   (30,169)    (26,684)
Repayments of Bridge Loan.................................    (80,000)    --         --         --          --
Distributions to stockholders.............................   (117,656)   (47,000)   (53,300)   (17,000)    (17,600)
Repurchase of treasury stock..............................   (203,458)    --         --         --          --
---------  ---------  ---------  ---------  -----------
Net cash provided by (used in) financing
activities.........................................   (140,249)   (79,919)   (86,460)   (10,426)     11,573
---------  ---------  ---------  ---------  -----------
Effect of exchange rates on cash............................     --             20         20        (28)         11
Net increase (decrease) in cash.....................       (465)     2,944        423     (1,857)      2,166
Cash at beginning of period.................................      3,515      3,050      5,994      5,994       6,417
---------  ---------  ---------  ---------  -----------
Cash at end of period.......................................  $   3,050  $   5,994  $   6,417  $   4,137   $   8,583
---------  ---------  ---------  ---------  -----------
---------  ---------  ---------  ---------  -----------
Supplemental disclosures:
Cash paid during the period for:
Interest................................................  $   7,189  $  16,380  $  15,396  $   6,665   $   5,619
Income taxes............................................      4,259      2,879      1,925        244         357
---------  ---------  ---------  ---------  -----------
---------  ---------  ---------  ---------  -----------

See accompanying notes to consolidated financial statements

F-6

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Guess  ?,  Inc.  (the  "Company")  designs,  develops  and  markets  quality
contemporary jeans  and  other  casual  wear for  men  and  women.  The  Company
distributes  it products  through major department  stores, specialty retailers,
foreign distributors and its network  of Company-owned and -operated retail  and
factory outlet stores.

BASIS OF PRESENTATION

The  consolidated financial statements  include the accounts  of the Company
and its foreign subsidiaries,  Guess Italia, S.r.l. and  Guess Europe, B.V.  The
Company  has a  79% and 50%  interest in  Guess Italia S.r.l.  and Guess Europe,
B.V., respectively. The remaining  21% of Guess Italia  S.r.l. and 50% of  Guess
Europe,   B.V.   is   owned   by   Marciano   International,   Inc.   ("Marciano
International"), a related party, which  is wholly-owned by the stockholders  of
the  Company. Accordingly, all references herein  to "Guess ?, Inc." include the
consolidated results  of  the Company  and  its subsidiaries.  All  intercompany
accounts and transactions have been eliminated in consolidation.

INTERIM FINANCIAL DATA

The  interim consolidated financial  data as of  March 31, 1996  and for the
quarters ended April 2, 1995 and  March 31, 1996 is unaudited. This  information
reflects  all adjustments, consisting  of normal recurring  adjustments, that in
the opinion  of  management,  are  necessary to  present  fairly  the  financial
position  and results  of operations of  the Company for  the periods indicated.
Results of operations for the interim periods are not necessarily indicative  of
the results of operations for the full year.

INVENTORIES

Inventories are valued at the lower of cost (first-in, first-out) or market.

TRADE AND ROYALTY RECEIVABLES

The  Company extends trade credit to its customers in the ordinary course of
business. None of the  receivables due from customers  at December 31, 1994  and
1995  and  March  31, 1996  involved  factored accounts  or  other contingencies
relating to third-party risk, except to  the extent that the Company has  chosen
to insure certain accounts from risk of loss under a catastrophic loss policy.

The Company has licensing arrangements with 26 licensees for use of its name
and  trademark.  Royalty payments  received by  the Company  are generally  on a
percentage of the licensees' net sales and require that minimum royalty payments
be made if specified  minimum sales levels are  not obtained. Royalty income  is
net  of direct expenses aggregating $2,387,000, $2,813,000, $2,331,000, $477,000
and $522,000 for 1993, 1994, 1995 and the quarters ended April 2, 1995 and March
31, 1996, respectively. The licensing agreements expire on various dates through
December 2003.

REVENUE RECOGNITION

The Company recognizes revenue from  the sale of merchandise upon  shipment.
The  Company accrues for estimated sales returns and allowances in the period in
which the related revenue is recognized. Royalty income is based upon licensees'
net sales.

F-7

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SIGNIFICANT CUSTOMERS

Individual customers aggregating  in excess of  10% of net  revenue for  the
years  ended December 31, 1993, 1994 and 1995 and the first quarters ended April
2, 1995 and March 31, 1996 are summarized as follows:

FIRST QUARTER ENDED,
YEAR ENDED DECEMBER 31,
--------------------------
-------------------------------   APRIL 2,      MARCH 31,
1993       1994       1995        1995          1996
---------  ---------  ---------  -----------  -------------

Customer A...................................................       11.5%      10.3%      11.0%       12.2%          9.0%

DEPRECIATION AND AMORTIZATION

Depreciation and amortization of property  and equipment are provided  using
the straight-line method over the following useful lives:

18 to 31
Building and building improvements...................................          years
Land improvements....................................................        5 years
Machinery and equipment..............................................   3 to 5 years
Corporate aircraft...................................................  5 to 10 years
Corporate vehicles...................................................        3 years

Leasehold improvements are amortized over the lesser of the estimated useful
life  of the  asset or the  term of the  lease. Construction in  progress is not
depreciated until the related asset is completed.

FOREIGN CURRENCY TRANSLATION

In accordance with  the Financial Accounting  Standards Board Statement  No.
52,  balance sheet accounts  of the Company's  foreign operations are translated
from foreign currencies  into U.S. dollars  at year end  rates while income  and
expenses are translated at the weighted average exchange rates for the year. The
related  translation adjustments are reflected as a foreign currency translation
adjustment in the consolidated balance sheet.

INCOME TAXES

The Company has elected to be  treated for Federal and certain state  income
tax purposes as an S corporation under Subchapter S of the Internal Revenue Code
and  comparable state laws. As  a result, the earnings  of the Company have been
included in the  taxable income of  the Company's stockholders  for Federal  and
certain  state  income tax  purposes,  and the  Company  has generally  not been
subject to income tax  on such earnings, other  than California and other  state
franchise taxes.

In  February 1992, the Financial Accounting Standards Board issued Statement
No. 109, "Accounting for Income Taxes."  One of the provisions of Statement  No.
109 enables companies to record deferred tax assets for the future benefit to be
derived  from certain deductible temporary  differences. The Company has adopted
the provisions  of Statement  No. 109  effective January  1, 1993;  however,  as
differences  giving rise to deferred tax  assets are immaterial, the Company has
not recorded any deferred tax assets at December 31, 1994 and 1995.

PRO FORMA NET EARNINGS

Pro forma  net earnings  represents the  results of  operations adjusted  to
reflect a provision for income taxes on historical earnings before income taxes,
which  gives effect  to the  change in the  Company's income  tax status  to a C
corporation as a result of the public sale of its common stock. When the Company
terminates its  S corporation  status, which  is expected  to occur  immediately
prior  to the consummation of the Offerings,  it will record an earnings benefit
resulting  from   the   establishment   of  net   deferred   tax   assets.   The

F-8

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
amount  of the  benefit to be  recorded (approximately $7,337,000)  at March 31,
1996 will  be dependent  upon  temporary differences  existing  at the  date  of
termination  of  the Company's  S corporation  status. The  principal difference
between the pro forma income tax rate and Federal statutory rate of 35%  relates
primarily to state income taxes.

Pro forma net earnings per share has been computed by dividing pro forma net
earnings  by the weighted  average number of shares  of common stock outstanding
during the period.

PRO FORMA BALANCE SHEET INFORMATION

Pro forma balance sheet information as of March 31, 1996 has been  presented
to  reflect i) the S corporation distribution (the "S Corporation Distribution")
to be made in an amount equal to the previously earned and undistributed taxable
S corporation earnings aggregating $180,800,000 through the date of  termination
of  the Company's S corporation status as  if such distribution had been made at
March 31, 1996  and the Company's  S corporation status  had been terminated  at
such  date and ii) an estimated $7,337,000 of net deferred tax assets that would
have been recorded  had the Company's  S corporation status  been terminated  on
March  31, 1996.  The pro  forma paid-in capital  reflects a  reduction of $12.8
million for that portion of the S Corporation Distribution which is in excess of
financial statement retained earnings.

CREDIT RISK

The Company sells  its merchandise principally  to customers throughout  the
United States and Europe. Management performs regular evaluations concerning the
ability  of its customers  to satisfy their obligations  and records a provision
for doubtful accounts based upon these evaluations. The Company's credit  losses
for  the periods presented are insignificant  and have not exceeded management's
estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The  carrying  amount   of  the  Company's   financial  instruments,   which
principally  include cash,  short and long-term  investments, trade receivables,
accounts payable  and  accrued expenses,  approximates  fair value  due  to  the
relatively short maturity of such instruments.

The  fair value of the Company's debt instruments are based on the amount of
future cash flows associated with each instrument discounted using the Company's
borrowing rate. At December 31, 1994 and  1995 and March 31, 1996, the  carrying
value of all financial instruments was not materially different from fair value.

USE OF ESTIMATES

Management  of the  Company has made  a number of  estimates and assumptions
relating to  the reporting  of  assets and  liabilities  and the  disclosure  of
contingent  assets  and  liabilities  to  prepare  these  consolidated financial
statements in conformity with  generally accepted accounting principles.  Actual
results could differ from these estimates.

RECLASSIFICATIONS

Certain  reclassifications  have  been  made  to  the  1993,  1994  and 1995
financial statements to conform to the March 31, 1996 presentation.

2.  INVESTMENTS

Long-term investments consist of  equity securities aggregating  $3,136,000,
$3,394,000  and $3,404,000  at December  31, 1994 and  1995 and  March 31, 1996,
respectively. The  investments  are generally  accounted  for under  the  equity
method  of accounting.  Supplemental information  on investee  companies has not
been provided as it is immaterial to the consolidated financial statements.

F-9

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

3.  INVENTORIES
Inventories at December 31, 1994 and 1995 and March 31, 1996 are  summarized
as follows (in thousands):

1994       1995
---------  ---------   MARCH 31,
1996
-----------
(UNAUDITED)

Raw materials........................................................  $  17,047  $   9,788   $  12,695
Work in process......................................................     14,032     11,264      12,687
Finished goods.......................................................     52,693     51,837      65,090
---------  ---------  -----------
$  83,772  $  72,889   $  90,472
---------  ---------  -----------
---------  ---------  -----------

4.  PROPERTY AND EQUIPMENT
Property  and equipment at December 31, 1994  and 1995 and March 31, 1996 is
summarized as follows (in thousands):

1994       1995
---------  ---------   MARCH 31,
1996
-----------
(UNAUDITED)

Land and land improvements...........................................  $   5,725  $   5,729   $   5,729
Building and building improvements...................................      8,435      8,446       8,446
Leasehold improvements...............................................     25,470     36,059      37,007
Machinery and equipment..............................................     40,389     48,279      49,446
Corporate aircraft...................................................     18,324     19,138      20,306
Construction in progress.............................................        363      2,269       1,450
---------  ---------  -----------
98,706    119,920     122,384
Less accumulated depreciation and amortization.......................     38,981     51,721      55,856
---------  ---------  -----------
$  59,725  $  68,199   $  66,528
---------  ---------  -----------
---------  ---------  -----------

Construction in progress at  December 31, 1994 and  1995 and March 31,  1996
represents   the  costs  associated  with  the  construction  of  buildings  and
improvements used in the Company's  operations and other capitalizable  expenses
for projects in progress.

F-10

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

5.  NOTES PAYABLE AND LONG-TERM DEBT
Notes payable and long-term debt at December 31, 1994 and 1995 and March 31,
1996 are summarized as follows (in thousands):

1994        1995
----------  ----------   MARCH 31,
1996
-----------
(UNAUDITED)

9 1/2% Senior Subordinated Notes due 2003 (see note 7)......................  $  115,000  $  105,000   $ 105,000
Advances under secured $100,000,000 long-term line of credit with a
syndicate of banks, interest is variable, with an average annual effective
rate of 6.42% in 1994 and 7.94% in 1995, 6.86% in the quarter ended March
31, 1996 and payable monthly...............................................      35,000      13,000      40,800
Note payable, secured by corporate aircraft, bearing interest at 10.59% per
year, due in quarterly installments of $665,385 through December 1995......       1,895      --          --
Note payable, secured by corporate aircraft, bearing interest at 8.23% per
year, payable in quarterly installments of $221,003 through March 1998.....       2,499       1,799       1,615
Other, including capitalized leases.........................................       2,101       3,536       5,093
----------  ----------  -----------
156,495     123,335     152,508
Less current installments...................................................       4,696       4,123       5,756
----------  ----------  -----------
$  151,799  $  119,212   $ 146,752
----------  ----------  -----------
----------  ----------  -----------

Aggregate  maturities of  notes payable and  long-term debt  at December 31,
1995 are summarized as follows:

December 31, (in thousands):
1996....................................................................  $   4,123
1997....................................................................     13,995
1998....................................................................        217
1999....................................................................     --
2000....................................................................     --
Thereafter..............................................................    105,000
---------
$ 123,335
---------
---------

The Company had outstanding letters  of credit aggregating $9.0 at  December
31,  1995 under  its $100  million long term  line of  credit. Additionally, the
Company has a  $25 million  letter of credit  facility pursuant  to which  $11.1
million in letters of credit were outstanding at December 31, 1995.

During  1994  and  1995, the  Company  repurchased $15.0  million  and $10.0
million of  the  Senior  Subordinated  Notes,  respectively.  Additionally,  the
related  deferred financing costs  of $468,000 and $281,000  were written off to
interest expense during 1994 and 1995, respectively.

F-11

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

6.  INCOME TAXES
The provision for state income taxes for the years ended December 31,  1993,
1994 and 1995 consists of the following (in thousands):

APRIL 2,     MARCH 31,
1993       1994       1995        1995         1996
---------  ---------  ---------  -----------  -----------

Current income tax..................................  $   3,014  $   3,540  $   2,895   $     559    $   1,271
Deferred tax benefit................................     (1,204)    --         --          --           --
---------  ---------  ---------       -----   -----------
$   1,810  $   3,540  $   2,895   $     559    $   1,271
---------  ---------  ---------       -----   -----------
---------  ---------  ---------       -----   -----------

Deferred income tax benefits in 1993 resulted from timing differences in the
recognition  of revenue and expense for  financial reporting purposes and income
tax purposes. These  differences related  principally to  a lawsuit  settlement,
depreciation expense and officers' compensation.

7.  STOCK REPURCHASE

On  August 23, 1993,  the Company and certain  of its stockholders completed
the purchase of  all of the  common stock  owned by a  selling stockholder.  The
Company  purchased  613,225 shares,  representing  38% of  the  then outstanding
shares, from the selling stockholder (the "Company Purchased Shares"). The total
purchase price for the  Company Purchased Shares  aggregated $203.5 million.  To
consummate  the acquisition  of the Company  Purchased Shares,  the Company used
proceeds from the sale of 9 1/2% Senior Subordinated Notes due 2003 (the "Senior
Subordinated Notes") aggregating  $130.0 million principal  amount and a  Bridge
Loan of $80.0 million.

The  Senior Subordinated Notes have  a maturity date of  August 15, 2003 and
accrue interest, payable semiannually, at an  original rate of interest of  10%.
On  February 7, 1994, the Company  exchanged these Notes for publicly registered
notes which reduced this interest rate to 9 1/2%, until maturity. The notes  are
redeemable at the option of the Company, in whole or in part, on or after August
15,  1998, at various redemption prices. Additionally, the Company may redeem up
to 35% of  the original aggregate  principal amount of  the Senior  Subordinated
Notes at any time on or prior to August 15, 1996 in the event of a Public Equity
Offering  in which the Company receives proceeds of not less than $30.0 million,
at a redemption price of 109% of the principal amount of the notes redeemed.

In connection with the purchase of the Company Purchased Shares, the Company
charged retained earnings $52.7 million,  representing the allocable portion  of
retained  earnings as of August 23, 1993,  the purchase date. The remaining cost
of the acquired shares, or $150.8 million, representing purchase price in excess
of the  selling  stockholder's  allocated retained  earnings,  was  recorded  as
treasury stock in the accompanying consolidated financial statements.

Deferred  financing costs totaling $3.3  million were incurred in connection
with the sale of the Senior  Subordinated Notes, and $2.4 million were  incurred
in connection with the Bridge Loan. Such deferred financing costs, plus expenses
of  the offering  of the  Senior Subordinated Notes  and Bridge  Loan, have been
capitalized  as  deferred  financing  costs  and  will  be  amortized  over  the
respective  terms of the  related indebtedness. The costs  related to the Bridge
Loan were fully amortized upon the repayment of the Bridge Loan and recorded  as
interest  expense in  the accompanying  Consolidated Statement  of Earnings. See
also note 5.

8.  RELATED PARTY TRANSACTIONS

The Company is engaged in various transactions with entities affiliated with
trusts for  the respective  benefit of  Maurice, Paul  and Armand  Marciano  the
("Marciano Trusts"). The Company believes that each

F-12

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

8.  RELATED PARTY TRANSACTIONS (CONTINUED)

of  the companies, in which the Marciano  Trusts have an investment, and related
party transactions discussed below were entered into on terms no less  favorable
to the Company than could have been obtained from an unaffiliated third party.

LICENSE ARRANGEMENTS AND LICENSEE TRANSACTIONS

On  January 1,  1995, the  Company entered  into a  licensing agreement with
Charles David of California ("Charles  David"). This new agreement superseded  a
prior  license agreement dated September  28, 1990 and amended  in May 1993. The
Marciano Trusts and Nathalie Marciano (the spouse of Maurice Marciano)  together
own 50% of Charles David, and the remaining 50% is owned by the father-in-law of
Maurice  Marciano.  The license  agreement grants  Charles  David the  rights to
manufacture worldwide and distribute worldwide (except Japan) men's, women's and
some children's leather and rubber footwear, excluding athletic footwear,  which
bear  the GUESS logo and trademark. The  license also includes related shoe care
products and  accessories. Gross  royalties  earned by  the Company  under  such
license  agreement for the fiscal years ended  December 31, 1993, 1994 and 1995,
and for the quarter ended March 31, 1996, was $1,707,000, $1,893,000, $2,117,000
and  $416,000,  respectively.  In  the  same  respective  periods,  the  Company
purchased  $3,715,000, $4,814,000,  $6,375,000 and  $1,192,000 of  products from
Charles David for resale in the retail division's stores.

On September 1, 1994,  the Company entered into  a licensing agreement  with
California  Sunshine Active Wear, Inc.  ("California Sunshine"), granting it the
rights to manufacture and distribute certain men's and women's activewear, which
bear the GUESS  logo and trademark,  in the United  States. The Marciano  Trusts
together  own 51% of California Sunshine.  Gross royalties earned by the Company
under such license agreement  for the fiscal years  ended December 31, 1994  and
1995,  and for the quarter ended March  31, 1996, was $0, $342,000 and $103,000,
respectively. In the same respective periods, the Company purchased $0, $254,000
and $68,000  of products  from  California Sunshine  for  resale in  the  retail
division's stores.

Effective  January 1, 1995,  the Company entered  into a licensing agreement
with Guess Italia, S.r.l. ("Guess Italia"),  granting it the exclusive right  in
Italy  and  non-exclusive right  in  other parts  of  Europe to  manufacture and
distribute men's and women's  apparel and accessories that  bear the GUESS  logo
and  trademark. Guess  Italia is owned  79% by  the Company and  21% by Marciano
International, Inc., a company  wholly owned by the  Marciano Trusts, and  being
merged  into the Company as a part of the Reorganization. Gross royalties earned
by the Company under such license  agreement for the fiscal year ended  December
31,  1995, and for the quarter ended  March 31, 1996, was $480,000 and $292,000,
respectively. During 1993, 1994 and 1995  and the quarter ended March 31,  1996,
the  Company  purchased $0,  $0, $511,000  and $204,000  of products  from Guess
Italia for resale  in the  retail division's  stores, and  sold $0,  $1,100,000,
$399,000 and $72,000 of products, respectively.

On  May 3, 1994, the  Company entered into an  agreement with Ranche Limited
("Ranche") to serve  as a  non-exclusive buying agent  for the  Company in  Hong
Kong,  which agreement was  terminated in the  first quarter of  1996. Ranche is
currently a wholly  owned subsidiary of  Guess Europe, B.V.  In the fiscal  year
ended  December 31, 1995, and in the quarter ended March 31, 1996, Ranche earned
commission income from the Company of $1,334,000 and $192,000, respectively,  in
connection  with  supplying  product.  In  addition,  Ranche  operates  under  a
licensing  arrangement  to  distribute   product  to  authorized   distributors.
Aggregate royalty income earned by the Company under such license for the fiscal
year  ended December  31, 1995, and  for the  quarter ended March  31, 1996, was
$240,000 and $84,000, respectively.

On December 1,  1992, the Company  entered into a  licensing agreement  with
Nantucket  Industries, Inc.  ("Nantucket Industries")  granting it  the right to
distribute and manufacture  men's and  women's innerwear, which  bear the  GUESS
logo  and trademark, in the United States. The Marciano Trusts together own 8.9%
of

F-13

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

8.  RELATED PARTY TRANSACTIONS (CONTINUED)
Nantucket Industries. Gross royalties earned  by the Company under such  license
agreement  for the fiscal years ended December  31, 1993, 1994 and 1995, and for
the quarter ended March 31, 1996, was $417,000, $214,000, $264,000 and  $80,000,
respectively.  In the  same respective  periods, the  Company purchased $23,000,
$201,000, $505,000 and $241,000 of products from Nantucket Industries for resale
in the retail division's stores.

LEASES

The Company leases  manufacturing, warehouse  and administrative  facilities
and  one retail  administrative facility  from partnerships  affiliated with the
Marciano Trusts. The leases will expire  in July 2008. Aggregate lease  payments
under  such leases for the  fiscal years ended December  31, 1993, 1994 and 1995
and the  quarters  ended April  2,  1995 and  March  31, 1996  were  $2,065,000,
$2,610,000, $2,803,000, $625,000 and $625,000, respectively.

9.  COMMITMENTS AND CONTINGENCIES

LEASES

The  Company leases its showrooms and retail store locations under operating
lease agreements expiring  on various  dates through  July 2008.  Some of  these
leases  require the  Company to  make periodic  payments for  property taxes and
common area  operating  expenses. Certain  leases  include rent  abatements  and
scheduled  rent  escalations,  for which  the  effects are  being  amortized and
recorded over the  lease term.  The Company also  leases some  of its  equipment
under operating lease agreements expiring at various dates through May, 1999.

Future  minimum  rental  payments under  noncancelable  operating  leases at
December 31, 1995 are as follows:

Year ending December 31, (in thousands):
1996....................................................................  $  19,784
1997....................................................................     20,525
1998....................................................................     19,205
1999....................................................................     17,481
2000....................................................................     16,509
Thereafter..............................................................     74,964
---------
$ 168,468
---------
---------

Rental expense for all operating leases during the years ended December  31,
1993,  1994,  and  1995  aggregated  $13,276,000,  $16,295,000,  and $21,940,000
respectively. Rental expenses  for the first  quarters ended April  2, 1995  and
March 31, 1996 aggregated $4,822,000 and $6,186,000, respectively.

INCENTIVE BONUSES

Certain  officers of the Company are  entitled to incentive bonuses based on
the Company's profits.

LITIGATION

The Company  is a  party  to various  claims,  complaints, and  other  legal
actions  that have arisen in the ordinary  course of business from time to time.
The Company believes that the outcome  of all pending legal proceedings, in  the
aggregate,  will not have  a material adverse effect  on the Company's financial
condition or the results of its operations.

F-14

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

10. 401(K) SAVINGS PLAN

On January 1, 1992,  the Company established the  Guess ? Inc. Savings  Plan
(the  "Savings Plan") under  Section 401(k) of the  Internal Revenue Code. Under
the Savings Plan, associates may contribute up to 15% of their compensation  per
year  subject  to the  elective limits  as defined  by Internal  Revenue Service
guidelines and the  Company may make  matching contributions in  amounts not  to
exceed  1.5% of the associates' annual compensation. The Company's contributions
to the Savings  Plan during the  years ended  December 31, 1993,  1994 and  1995
aggregated  $221,000, $213,000 and $261,000,  respectively. Contributions to the
Savings Plan during the first  quarters ended April 2,  1995 and March 31,  1996
aggregated $73,000 and $78,000, respectively.

11. QUARTERLY INFORMATION (UNAUDITED)
The  following is a summary of the unaudited quarterly financial information
for the years ended December 31, 1994 and 1995 (in thousands):

FIRST       SECOND      THIRD       FOURTH
QUARTER     QUARTER     QUARTER     QUARTER
----------  ----------  ----------  ----------

1994
Net revenue............................................  $  122,729  $  119,383  $  160,783  $  144,917
Gross profit...........................................      59,784      53,611      79,232      63,196
Earnings before income taxes...........................      24,186      16,627      36,591      23,777
Net earnings...........................................      23,479      16,064      35,333      22,765
SUPPLEMENTAL PRO FORMA EARNINGS:
Earnings before income taxes...........................      24,186      16,627      36,591      23,777
Net earnings...........................................      14,512       9,976      21,955      14,266
1995
Net revenue............................................     124,903     104,749     133,129     123,952
Gross profit...........................................      59,638      49,207      59,148      56,598
Earnings before income taxes...........................      21,271      12,998      17,322      15,223
Net earnings...........................................      20,712      12,282      16,484      14,441
SUPPLEMENTAL PRO FORMA EARNINGS:
Earnings before income taxes...........................      21,271      12,998      17,323      15,222
Net earnings...........................................      12,763       7,799      10,394       9,132

12. INTERNATIONAL REVENUE
Net revenue is summarized as follows for the years ended December 31,  1993,
1994 and 1995 and the first quarters ended April 2, 1995 and March 31, 1996:

FIRST QUARTER ENDED
----------------------
APRIL 2,   MARCH 31,
1993        1994        1995        1995        1996
----------  ----------  ----------  ----------  ----------

Domestic...................................  $  506,301  $  527,296  $  452,944  $  115,831  $  116,226
International..............................      13,923      20,516      33,789       9,072      18,672
----------  ----------  ----------  ----------  ----------
$  520,224  $  547,812  $  486,733  $  124,903  $  134,898
----------  ----------  ----------  ----------  ----------
----------  ----------  ----------  ----------  ----------

International  revenue  includes  domestic sales  to  international markets,
sales of product from international subsidiaries and net royalties from  foreign
licenses.

F-15

GUESS ?, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996

13. SUBSEQUENT EVENTS
In  May 1996, the Board of Directors authorized the filing of a registration
statement for an initial public offering of the Company's common stock.

Prior to  the consummation  of the  Offerings, (i)  Marciano  International,
which  is owned by  the Marciano Trusts  and currently holds  an interest in the
subsidiaries of Guess,  will be  merged with  and into  Guess, (ii)  all of  the
capital  stock of Guess Italia will be  contributed to Guess Europe, B.V., (iii)
the Company will effect a  stock split of the Common  Stock and (iv) as part  of
the  S Corporation Distribution, the Company will distribute to its stockholders
the S Distribution  Notes and  an aircraft  owned by  the Company.  All of  such
transactions are referred to as the "Reorganization".

Prior  to the consummation of the transactions related to the Offerings (the
"Closing Date"), the Company's S corporation  status will be terminated (the  "S
Termination  Date"). Prior to the S Termination Date, the Company will declare a
distribution to its stockholders that will include all of its previously  earned
and  undistributed S corporation earnings through the date of termination of the
Company's S corporation status. The S Corporation Distribution will occur  prior
to  the S Termination Date and will be comprised of an aircraft (with a value of
less than  $10  million) owned  by  the  Company and  promissory  notes  bearing
interest at 8% per annum (the "S Distribution Notes"). Guess estimates that such
undistributed  earnings will be between $    million  and $    million as of the
Closing Date, including a gain expected to be recognized upon the disposition of
the Company's aircraft. On and after the S Termination Date, the Company will no
longer be treated as an S corporation and, accordingly, will be fully subject to
Federal and state income taxes.

Immediately prior  to the  Offerings,  the Company  will grant  options  for
shares pursuant to the Company's 1996 Equity Incentive Plan and the 1996
Non-Employee Director's Stock Option Plan. Of such options,
will  have an exercise price equal to the initial public
offering price  for shares  of common  stock to  be sold  in the  Offerings  and
will have an exercise price of $     .

F-16

- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------

NO  DEALER, SALESPERSON OR OTHER INDIVIDUAL  HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR  MAKE ANY  REPRESENTATIONS NOT  CONTAINED IN  THIS PROSPECTUS  IN
CONNECTION  WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL,  OR  A SOLICITATION  OF  AN  OFFER TO  BUY,  THE COMMON  STOCK  IN  ANY
JURISDICTION  WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.  NEITHER THE  DELIVERY OF  THIS PROSPECTUS  NOR ANY  SALE  MADE
HEREUNDER  SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE  AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

--------------

TABLE OF CONTENTS

PAGE
-----

Prospectus Summary.............................           3
Risk Factors...................................           7
Company History, the Reorganization and Prior S
Corporation Status............................          12
Use of Proceeds................................          13
Dividend Policy................................          13
Capitalization.................................          14
Dilution.......................................          15
Selected Financial Data........................          16
Selected Pro Forma Financial Data..............          18

Management's Discussion and Analysis of
Financial Condition and Results of
Operations....................................          19
Business.......................................          29
Management.....................................          42
Certain Transactions...........................          53
Principal Stockholders.........................          56
Shares Eligible for Future Sale................          57
Description of Capital Stock...................          58
Certain United States Federal Tax Consequences
to Non-United States Holders..................          60
Underwriting...................................          62
Legal Matters..................................          64
Experts........................................          64
Additional Information.........................          64
Index to Financial Statements..................         F-1

9,200,000 SHARES

[LOGO]

COMMON STOCK

-------------------

PROSPECTUS

-------------------

MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED

, 1996

- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------

Information   contained  herein  is  subject   to  completion  or  amendment.  A
registration statement  relating to  these securities  has been  filed with  the
Securities  and Exchange  Commission. These securities  may not be  sold nor may
offers to buy be accepted prior  to the time the registration statement  becomes
effective.  This  prospectus  shall  not  constitute an  offer  to  sell  or the
solicitation of an offer to buy nor shall there be any sale of these  securities
in  any state in which such offer,  solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JULY 3, 1996

PROSPECTUS

9,200,000 SHARES

[LOGO]

COMMON STOCK

------------------

Of the 9,200,000  shares of Common  Stock of Guess  ?, Inc. offered  hereby,
1,840,000  shares  are initially  being offered  outside  the United  States and
Canada by the International  Managers and 7,360,000  shares are initially  being
offered  in the United States  and Canada by the  U.S. Underwriters. The initial
public offering  price and  the aggregate  underwriting discount  per share  are
identical for each of the Offerings. See "Underwriting."

Prior  to the  Offerings, there  has been  no public  market for  the Common
Stock. It is  currently estimated  that the  initial public  offering price  per
share  of Common  Stock will be  between $21  and $23. See  "Underwriting" for a
discussion of the  factors to be  considered in determining  the initial  public
offering price of the Common Stock.

The  Company has  applied to  list the  Common Stock  on the  New York Stock
Exchange.

SEE "RISK FACTORS" BEGINNING ON PAGE  7 FOR A DISCUSSION OF CERTAIN  FACTORS
THAT  SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.

------------------------

THESE SECURITIES  HAVE  NOT  BEEN  APPROVED OR  DISAPPROVED  BY  THE  SECURITIES
AND   EXCHANGE  COMMISSION  OR  ANY   STATE  SECURITIES  COMMISSION,  NOR  HAS
THE  SECURITIES   AND   EXCHANGE   COMMISSION  OR   ANY   STATE   SECURITIES
COMMISSION    PASSED   UPON   THE   ACCURACY   OR   ADEQUACY   OF   THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

PRICE TO         UNDERWRITING        PROCEEDS TO
PUBLIC          DISCOUNT (1)        COMPANY (2)

Per Share...........................          $                  $                  $
Total (3)...........................          $                  $                  $

(1) The Company  and the  Principal Stockholders  have agreed  to indemnify  the
several   Underwriters  against   certain  liabilities,   including  certain
liabilities  under   the   Securities  Act   of   1933,  as   amended.   See
"Underwriting."

(2) Before deducting expenses payable by the Company estimated to be $         .

(3) The  Company  has  granted  to  the  International  Managers  and  the  U.S.
Underwriters options,  exercisable within  30 days  after the  date of  this
Prospectus,  to purchase up to an additional 276,000 and 1,104,000 shares of
Common Stock, respectively, to  cover over-allotments, if  any. If all  such
additional  shares are  purchased, the  total Price  to Public, Underwriting
Discount and Proceeds to Company will be $         , $       and $         ,
respectively. See "Underwriting."

------------------------

The  shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as  and if issued to and  accepted by them, and subject  to
the  approval  of certain  legal  matters by  counsel  for the  Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and  to reject orders in whole  or in part. It is  expected
that  delivery of the shares of Common Stock  will be made in New York, New York
on or about            , 1996.

------------------------

MERRILL LYNCH INTERNATIONAL  MORGAN STANLEY & CO.

INTERNATIONAL

----------------------------------------

The date of this Prospectus is            , 1996.

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

UNDERWRITING

Subject  to the terms and conditions  set forth in an international purchase
agreement (the "International Purchase Agreement") among the Company and each of
the underwriters named  below (the "International  Managers"), and  concurrently
with  the sale of 7,360,000 shares of  Common Stock to the U.S. Underwriters (as
defined below), the  Company has  agreed to sell  to each  of the  International
Managers,  and  each  of  the International  Managers  severally  has  agreed to
purchase from  the Company,  the number  of  shares of  Common Stock  set  forth
opposite its name below.

NUMBER
INTERNATIONAL MANAGERS                                         OF SHARES
-----------

Merrill Lynch International...........................................
Morgan Stanley & Co. International Limited............................
-----------
Total.......................................................    1,840,000
-----------
-----------

Merrill  Lynch International and Morgan  Stanley & Co. International Limited
are acting  as  representatives  (the "International  Representatives")  of  the
International Managers.

The  Company has also entered into  a purchase agreement (the "U.S. Purchase
Agreement"  and,  together  with  the  International  Purchase  Agreement,   the
"Purchase Agreements") with certain underwriters in the United States and Canada
(collectively,  the  "U.S. Underwriters,"  and  together with  the International
Managers, the "Underwriters"), for  whom Merrill Lynch,  Pierce, Fenner &  Smith
Incorporated and Morgan Stanley & Co. Incorporated are acting as representatives
(the    "U.S.   Representatives"   and,    together   with   the   International
Representatives, the "Representatives"). Subject to the terms and conditions set
forth in  the  U.S.  Purchase  Agreement, and  concurrently  with  the  sale  of
1,840,000  shares of Common Stock to  the International Managers pursuant to the
International Purchase Agreement,  the Company has  agreed to sell  to the  U.S.
Underwriters,  and the U.S. Underwriters have  severally agreed to purchase from
the Company,  an aggregate  of 7,360,000  shares of  Common Stock.  The  initial
public  offering price per  share of Common Stock  and the underwriting discount
per share  of  Common  Stock  are identical  under  the  International  Purchase
Agreement and the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement, the
several  International Managers and the several U.S. Underwriters, respectively,
have agreed, subject to the terms and conditions set forth therein, to  purchase
all  of the shares of Common Stock being sold pursuant to each such Agreement if
any of the  shares of Common  Stock being  sold pursuant to  such Agreement  are
purchased.  Under  certain  circumstances,  the  commitments  of  non-defaulting
International Managers  or  U.S.  Underwriters  (as the  case  may  be)  may  be
increased.  The purchase of shares of Common Stock by the International Managers
is conditioned  upon  the  purchase  of  shares of  Common  Stock  by  the  U.S.
Underwriters and vice versa.

The  International Managers and  the U.S. Underwriters  have entered into an
intersyndicate agreement  (the  "Intersyndicate Agreement")  providing  for  the
coordination  of their activities. The Underwriters are permitted to sell shares
of Common Stock  to each  other for  purposes of  resale at  the initial  public
offering  price, less an  amount not greater than  the selling concession. Under
the terms of the  Intersyndicate Agreement, the  International Managers and  any
dealer  to whom they sell shares of Common  Stock will not offer to sell or sell
shares of Common Stock to persons who are U.S. or Canadian persons or to persons
they believe intend to resell to persons  who are U.S. or Canadian persons,  and
the  U.S. Underwriters and any  dealer to whom they  sell shares of Common Stock
will not offer to sell or sell shares of Common Stock to non-U.S. persons or  to
non-Canadian  persons or  to persons they  believe intend to  resell to non-U.S.
persons or non-Canadian persons, except in the case of transactions pursuant  to
the Intersyndicate Agreement. The International Representatives have advised the
Company that the International Managers propose initially

62

to offer the shares of Common Stock to the public at the initial public offering
price  set forth on the  cover page of this  Prospectus, and to certain selected
dealers  at  such  price  less   a  concession  not  in  excess   of  $
per  share  of Common  Stock.  The International  Managers  may allow,  and such
dealers may reallow, a discount not in excess of $    per share of Common  Stock
on sales to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.

Each  International Manager has agreed that (i)  it has not offered or sold,
and will not for a period of six months following consummation of the  Offerings
offer  or sell, in  the United Kingdom by  means of any  document, any shares of
Common Stock offered  hereby, other  than to persons  whose ordinary  activities
involve  them in  acquiring, holding, managing  or disposing  of investments (as
principal or  agent)  for  the  purpose of  their  businesses  or  otherwise  in
circumstances  that do not constitute an offer  to the public within the meaning
of the Public Offers of Securities  Regulations 1995; (ii) it has complied  with
and  will comply with all applicable provisions of the Financial Services Act of
1986 with respect to  anything done by  it in relation to  the shares of  Common
Stock  in, from or otherwise involving the  United Kingdom and (iii) it has only
issued or passed on and will only issue  or pass on to any person in the  United
Kingdom  any document received by it in  connection with the issue of the shares
of Common Stock if that person is of a kind described in Article [9(3)/11(3)] of
the Financial Services Act  1986 (Investment Advertisements) (Exemptions)  Order
1995,  as amended, or is a person to whom the document may otherwise lawfully be
issued or passed on.

Purchasers of the shares hereby may be required to pay stamp taxes and other
charges in accordance with the laws and practices of the country of purchase, in
addition to the offering price set forth on the cover page hereby.

At the request  of the Company,  the U.S. Underwriters  have reserved up  to
750,000  shares of Common Stock for sale at the initial public offering price to
directors, officers, employees, business associates  and related persons of  the
Company.  The number of shares of Common Stock available for sale to the general
public will be reduced to the extent such persons purchase such reserved shares.
Any reserved  shares  which  are  not  so  purchased  will  be  offered  by  the
Underwriters to the general public on the same basis as the other shares offered
hereby.  Certain individuals purchasing reserved shares may be required to agree
not to sell,  offer or otherwise  dispose of any  shares of Common  Stock for  a
period of three months after the date of this Prospectus.

The  Company, the Principal Stockholders and certain executive officers have
agreed, subject to certain exceptions, not to, directly or indirectly, (i) sell,
grant any option  to purchase  or otherwise transfer  or dispose  of any  Common
Stock  or securities convertible into or  exchangeable or exercisable for Common
Stock or file a registration statement under the Securities Act with respect  to
the foregoing or (ii) enter into any swap or other agreement or transaction that
transfers,  in whole or  in part, the  economic consequence of  ownership of the
Common Stock, without the prior written  consent of Merrill Lynch, for a  period
of 180 days after the date of this Prospectus.

The Company has granted an option to the International Managers, exercisable
within 30 days after the date of this Prospectus, to purchase up to an aggregate
of            additional shares  of Common Stock at  the initial public offering
price set forth  on the  cover page of  this Prospectus,  less the  underwriting
discount.  The International  Managers may  exercise this  option only  to cover
over-allotments, if any, made on the sale of the Common Stock offered hereby. To
the  extent  that  the  International   Managers  exercise  this  option,   each
International  Manager  will be  obligated,  subject to  certain  conditions, to
purchase a number  of additional shares  of Common Stock  proportionate to  such
International  Manager's initial  amount reflected  in the  foregoing table. The
Company also has granted an option to the U.S. Underwriters, exercisable  within
30  days after the  date of this Prospectus,  to purchase up  to an aggregate of
additional shares of Common Stock  to cover over-allotments, if any,  on
terms similar to those granted to the International Managers.

Prior  to the Offerings, there  has been no public  market for the shares of
Common Stock  of  the  Company.  The initial  public  offering  price  has  been
determined  through negotiations  between the  Company and  the Representatives.
Among the factors considered in  determining the initial public offering  price,
in  addition  to  prevailing  market conditions,  are  price-earnings  ratios of
publicly traded companies that the

63

Representatives believe  to  be comparable  to  the Company,  certain  financial
information  of the Company, the history of,  and the prospects for, the Company
and  the  industry  in  which  it  competes,  an  assessment  of  the  Company's
management,  its past and present operations,  the prospects for, and timing of,
future revenues of the Company, the present state of the Company's  development,
and  the above factors  in relation to  market values and  valuation measures of
other companies engaged in  activities similar to the  Company. There can be  no
assurance  that an active  trading market will  develop for the  Common Stock or
that the  Common  Stock  will trade  in  the  public market  subsequent  to  the
Offerings at or above the initial public offering price.

The  Underwriters do not intend to confirm sales of the Common Stock offered
hereby to any accounts over which they exercise discretionary authority.

The Company  and the  Principal Stockholders  have agreed  to indemnify  the
several  Underwriters against  certain liabilities,  including liabilities under
the Securities  Act,  or to  contribute  to  payments the  Underwriters  may  be
required to make in respect thereof.

64

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO  DEALER, SALESPERSON OR OTHER INDIVIDUAL  HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR  MAKE ANY  REPRESENTATIONS NOT  CONTAINED IN  THIS PROSPECTUS  IN
CONNECTION  WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL,  OR  A SOLICITATION  OF  AN  OFFER TO  BUY,  THE COMMON  STOCK  IN  ANY
JURISDICTION  WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.  NEITHER THE  DELIVERY OF  THIS PROSPECTUS  NOR ANY  SALE  MADE
HEREUNDER  SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE  AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

--------------

TABLE OF CONTENTS

PAGE
-----

Prospectus Summary.............................           3
Risk Factors...................................           7
Company History, the Reorganization and Prior S
Corporation Status............................          12
Use of Proceeds................................          13
Dividend Policy................................          13
Capitalization.................................          14
Dilution.......................................          15
Selected Financial Data........................          16
Selected Pro Forma Financial Data..............          18

Management's Discussion and Analysis of
Financial Condition and Results of
Operations....................................          19
Business.......................................          29
Management.....................................          42
Certain Transactions...........................          53
Principal Stockholders.........................          56
Shares Eligible for Future Sale................          57
Description of Capital Stock...................          58
Certain United States Federal Tax Consequences
to Non-United States Holders..................          60
Underwriting...................................          62
Legal Matters..................................          64
Experts........................................          64
Additional Information.........................          64
Index to Financial Statements..................         F-1

9,200,000 SHARES

[LOGO]

COMMON STOCK

-------------------

PROSPECTUS

-------------------

MERRILL LYNCH INTERNATIONAL
MORGAN STANLEY & CO.

INTERNATIONAL

, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

SEC registration fee..............................................  $  83,911
NASD fee..........................................................     24,834
NYSE listing fee..................................................          *
Blue sky fees.....................................................          *
Printing and engraving expenses...................................          *
Accountants' fees and expenses....................................          *
Attorneys' fees and expenses......................................          *
Transfer agent fees...............................................          *
Miscellaneous.....................................................          *
---------
Total...........................................................  $       *
---------
---------

- ------------------------
*To be provided by amendment.

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Pursuant  to Section  145 of  the General  Corporation Law  of Delaware (the
"Delaware  Corporation  Law"),  Article  VI  of  the  Restated  Bylaws  of   the
Registrant,  a  copy of  which  is filed  as  Exhibit 3.2  to  this Registration
Statement, provides that the Registrant shall indemnify any person in connection
with the defense  or settlement of  any threatened, pending  or completed  legal
proceeding  (other than a legal proceeding by or in the right of the Registrant)
by reason of the fact that he is or was a director or officer of the  Registrant
or  is or was a director or officer  of the Registrant serving at the request of
the Registrant as a director, officer, employee or agent of another corporation,
partnership or other  enterprise against expenses  (including attorneys'  fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in  connection with  the defense  or settlement of  such legal  proceeding if he
acted in good faith and in a manner that he reasonably believes to be in or  not
opposed  to  the best  interests of  the  Registrant, and,  with respect  to any
criminal action or proceeding, if he had no reasonable cause to believe that his
conduct was unlawful. If the legal proceeding, however, is by or in the right of
the Registrant, the  director or officer  may be indemnified  by the  Registrant
against expenses (including attorneys' fees) actually and reasonably incurred in
connection  with the defense or settlement of  such legal proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed  to
the  best interests of the Registrant and  except that he may not be indemnified
in respect of any claim, issue or matter as to which he shall have been adjudged
to be liable to the Registrant unless a court determines otherwise.

Article VI  of the  Registrant's Bylaws  allows the  Registrant to  maintain
director and officer liability insurance on behalf of any person who is or was a
director  or officer of  the Registrant or  such person who  serves or served as
director, officer, agent,  or employee, at  another corporation, partnership  or
other enterprise at the request of the Registrant.

Pursuant to Section 102(b)(7) of the Delaware Corporation Law, Article Fifth
of  the Restated Certificate of Incorporation of the Registrant, a copy of which
is filed  as  Exhibit 3.1  to  this  Registration Statement,  provides  that  no
director  of the Registrant shall be personally  liable to the Registrant or its
stockholders for monetary  damages for  any breach of  his fiduciary  duty as  a
director;  provided, however, that such clause  shall not apply to any liability
of a director (1) for  any breach of this duty  of loyalty to the Registrant  or
its  stockholders,  (2) for  acts or  omissions that  are not  in good  faith or
involve intentional misconduct  or a  knowing violation  of the  law, (3)  under
Section  174 of the  Delaware Corporation Law,  or (4) for  any transaction from
which the director derived an improper personal benefit. The aforesaid provision
also eliminates  the  liability  of  any  stockholder  for  managerial  acts  or
omissions,  pursuant to Section 350 of the Delaware Corporation Law of any other
provision of Delaware law, to the same extent that such liability is limited for
a director.

II-1

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES.

In connection with the organization of the Registrant in August 1993, Armand
Marciano purchased 100 shares of common  stock of the Registrant. On August  23,
1993,  Armand  Marciano  sold  such  shares  to  Guess  ?,  Inc.,  a  California
corporation ("Guess California"), the  Registrant's predecessor. Thereafter,  in
connection  with the  merger of  Guess California  with and  into the Registrant
pursuant to an  Agreement and Plan  of Merger between  the Registrant and  Guess
California, all of the then outstanding shares of common stock of the Registrant
were cancelled and retired, and all of the then outstanding shares of the common
stock  of Guess California were converted into and became shares of common stock
of the Registrant. In addition, on August 23, 1993, Guess California sold $130.0
million principal  amount of  9 1/2%  Senior Subordinated  Notes due  2003  (the
"Senior  Subordinated Notes")  to Merrill  Lynch &  Co., Merrill  Lynch, Pierce,
Fenner & Smith, Incorporated ("Merrill Lynch")  at 100% of the principal  amount
thereof  (less aggregate discounts of $3.25  million). Each of such transactions
was exempt from the registration requirements of the Securities Act of 1933,  as
amended  (the "Securities Act"),  in reliance on Section  4(2) of the Securities
Act on the basis  that such transaction  did not involve  a public offering.  In
accordance  with the  agreement pursuant  to which  Merrill Lynch  purchased the
Senior Subordinated Notes,  Merrill Lynch agreed  to offer and  sell the  Senior
Subordinated  Notes only to "qualified institutional buyers" (as defined in Rule
144A under the Securities  Act), a limited  number of institutional  "accredited
investors"  (as defined in Rule 501(a)(1), (2),  (3) or (7) under the Securities
Act) and  pursuant to  offers and  sales that  occur outside  the United  States
within  the meaning  of Regulation  S under the  Securities Act.  Except for the
transactions referred  to  above,  there  have not  been  any  recent  sales  of
unregistered securities by the Registrant.

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

EXHIBIT
NUMBER                                 DESCRIPTION
- ---------  ----------------------------------------------------------------------

*1.1.  Form of U.S. Purchase Agreement.
*1.2.  Form of International Purchase Agreement.
*3.1.  Restated Certificate of Incorporation of the Registrant.
*3.2.  Restated Bylaws of the Registrant.
4.1.  Indenture, dated August 23, 1993, between the Registrant and First
Trust National Association, as Trustee. (1)
4.2.  First Supplemental Indenture, dated August 23, 1993, between the
Registrant and First Trust National Association, as Trustee. (1)
*4.3.  Specimen stock certificate.
*5.1.  Opinion of Shearman & Sterling.
*10.1.  Form of Amended and Restated Stockholders' Agreement, dated
, 1996.
10.2.  Letter Agreement, dated July 9, 1993, among the Registrant, Georges
Marciano, Maurice Marciano, Paul Marciano, Armand Marciano and trusts
for their respective benefit. (1)
10.3.  Employment Agreement, dated March 1, 1994, between the Registrant and
Roger A. Williams. (3)
*10.4.  Letter Agreement, dated January 22, 1996, between the Registrant and
Andrea Weiss.
*10.5.  Employment Agreement, dated as of May 14, 1996, between the Registrant
and Francis K. Duane.
10.6.  General Release and Indemnity Agreement, dated August 23, 1993, among
Maurice, Paul and Armand Marciano, their respective trusts, the
Registrant, Georges Marciano and his trust. (1)
10.7.  General Release Agreement, dated August 23, 1993, among Maurice, Paul
and Armand Marciano, their respective trusts, the Registrant, and
Georges Marciano and his trust. (1)
10.8.  Cancellation and Reassignment Agreement, dated August 23, 1993, among
the Registrant, MSKMarciano, Inc., Georges Marciano, Inc. and Georges
Marciano. (1)

II-2

EXHIBIT
NUMBER                                 DESCRIPTION
- ---------  ----------------------------------------------------------------------

10.9.  Alameda Lease, dated July 29, 1992, among the Registrant and 1444
Partners, Ltd. (1)
10.10. Revolving Credit Agreement, dated as of December 20, 1993, between the
Registrant and The First National Bank of Boston, as agent, and Sanwa
Bank California, as co-agent, and the group of financial institution
party thereto (the "Revolving Credit Agreement"). (3)
10.11. Security Agreement, dated December 20, 1993, between the Registrant
and the First National Bank of Boston, as agent for itself and for
certain lenders. (3)
10.12. Amendment No. 1 to the Revolving Credit Agreement, dated January 20,
1994, among the parties thereto. (4)
10.13. Amendment No. 2 to the Revolving Credit Agreement, dated April 1,
1994, among the parties thereto. (4)
10.14. Amendment No. 3 to the Revolving Credit Agreement, dated July 18,
1994, among the parties thereto. (4)
10.15. Amendment No. 4 to the Revolving Credit Agreement, dated October 24,
1994, among the parties thereto. (4)
10.16. Amendment No. 5 to the Revolving Credit Agreement, dated February 13,
1995, among the parties thereto. (5)
10.17. Amendment No. 6 to the Revolving Credit Agreement, dated September 14,
1995, among the parties thereto. (5)
10.18. Amendment No. 7 to the Revolving Credit Agreement, dated December 22,
1995, among the parties thereto. (5)
*10.19. Amendment No. 8 to the Revolving Credit Agreement, dated February 13,
1996, among the parties thereto.
10.20. Agreement as to Consignment of Documents and Related Matters, dated
December 22, 1995, between the Registrant and The First National Bank
of Boston. (5)
*10.21. 1996 Equity Incentive Plan.
*10.22. 1996 Non-Employee Directors' Stock Option Plan.
*10.23. Aircraft lease agreement.
*10.24. Employment Agreement, dated             , 1996, between the Registrant
and Maurice Marciano.
*10.25. Employment Agreement, dated             , 1996, between the Registrant
and Paul Marciano.
*10.26. Employment Agreement, dated             , 1996, between the Registrant
and Armand Marciano.
*21.1.  List of Subsidiaries.
23.1.  Consent of KPMG Peat Marwick LLP, independent certified public
accountants.
*23.2.  Consent of Shearman & Sterling (included in Exhibit 5.1).
+24.1.  Power of Attorney.

(b) Financial Statement Schedule:

DESCRIPTION
------------------------------------------------------------------------------

Schedule II                        Valuation and Qualifying Accounts

- ------------------------

+   Previously filed.

*   To be provided by amendment.

(1)  Incorporated  by  reference from  the  Registration Statement  on  Form S-1
(Registration No. 33-69236) originally filed by the Company on September 22,
1993.

II-3

(2) Incorporated by reference from Amendment No. 1 to the Registration Statement
on Form S-1 (File No. 33-69236) filed by the Company on November 24, 1993.

(3) Incorporated by reference from the  Company's Quarterly Report on Form  10-Q
for the quarter ended March 27, 1994.

(4)  Incorporated by reference from the Company's Annual Report on Form 10-K for
the year ended December 31, 1994.

(5) Incorporated by reference from the Company's Annual Report on Form 10-K  for
the year ended December 31, 1995.

ITEM 17.  UNDERTAKINGS.

(a)  Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted  to directors, officers and controlling persons  of
the   Registrant  pursuant  to  the  foregoing  provisions,  or  otherwise,  the
Registrant has been advised that in  the opinion of the Securities and  Exchange
Commission  such indemnification  is against public  policy as  expressed in the
Securities Act and is, therefore, unenforceable.  In the event that a claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
Registrant of expenses incurred  or paid by a  director, officer or  controlling
person  of  the Registrant  in the  successful  defense of  any action,  suit or
proceeding) is  asserted by  such  director, officer  or controlling  person  in
connection  with the Common Stock being  registered, the Registrant will, unless
in the  opinion  of its  counsel  the matter  has  been settled  by  controlling
precedent,  submit to a  court of appropriate  jurisdiction the question whether
such indemnification  by  it  is  against public  policy  as  expressed  in  the
Securities Act and will be governed by the final adjudication of such issue.

(b) The undersigned Registrant hereby undertakes that:

(1)  For purposes of determining any  liability under the Securities Act
of 1933, the information omitted from  the form of prospectus filed as  part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or  497(h)  under the  Securities Act  shall be  deemed to  be part  of this
Registration Statement as of the time it was declared effective.

(2) For the purpose  of determining any  liability under the  Securities
Act  of  1933,  each  post-effective  amendment  that  contains  a  form  of
prospectus shall be deemed  to be a new  registration statement relating  to
the  securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial BONA FIDE offering thereof.

(c)  The  undersigned  Registrant  hereby  undertakes  to  provide  to   the
Underwriters   at  the   closing  specified  in   the  underwriting  agreements,
certificates in such denominations and registered  in such names as required  by
the Underwriters to permit prompt delivery to each purchaser.

II-4

SIGNATURES

Pursuant  to the requirements of the  Securities Act of 1933, the Registrant
has duly caused this Registration  Statement to be signed  on its behalf by  the
undersigned,  thereunto duly  authorized, in the  City of Los  Angeles, State of
California, on July 2, 1996.

GUESS ?, INC.

By:                  *

-----------------------------------
Name:  Maurice Marciano
Title:  CHIEF EXECUTIVE OFFICER

Pursuant  to  the  requirements  of   the  Securities  Act  of  1933,   this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.

SIGNATURE                         TITLE                  DATE
- -----------------------------------  -------------------------  ----------------

Chairman of the Board and
*                    Chief Executive Officer
- -----------------------------------   (Principal Executive        July 2, 1996
Maurice Marciano             Officer)

*                   President, Chief
- -----------------------------------   Operating Officer and       July 2, 1996
Paul Marciano              Director

*                   Senior Executive Vice
- -----------------------------------   President, Secretary and    July 2, 1996
Armand Marciano             Director

/s/ ROGER A. WILLIAMS         Chief Financial Officer
- -----------------------------------   (Principal Financial and    July 2, 1996
Roger A. Williams            Accounting Officer)

/s/ ROGER A. WILLIAMS         Attorney-in-fact for the
- -----------------------------------   persons marked above
Roger A. Williams            with an *

II-5

SCHEDULE II
GUESS ?, INC. & SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1993, 1994, AND 1995
(IN THOUSANDS)

BALANCE AT    CHARGED TO    DEDUCTIONS    BALANCE
BEGINNING     COSTS AND        AND       AT END
DESCRIPTION                                                          OF PERIOD     EXPENSES     WRITE-OFFS   OF PERIOD
- ------------------------------------------------------------------  -----------  -------------  -----------  ---------

As of December 31, 1993
Allowance for obsolescence......................................   $   1,026        --         $     (26)  $   1,000
Accounts receivable.............................................       9,235         7,505          (834)     15,906

As of December 31, 1994
Allowance for obsolescence......................................       1,000         1,400        --           2,400
Accounts receivable.............................................      15,906           758        (6,273)     10,391

As of December 31, 1995
Allowance for obsolescence......................................       2,400         2,352          (392)      4,360
Accounts receivable.............................................      10,391         5,147        (4,689)     10,849

S-1

EXHIBIT INDEX

EXHIBIT                                                                                          SEQUENTIALLY
NUMBER                                         DESCRIPTION                                        NUMBER PAGE
- ---------  -------------------------------------------------------------------------------------  -------------

*1.1.  Form of U.S. Purchase Agreement.
*1.2.  Form of International Purchase Agreement.
*3.1.  Restated Certificate of Incorporation of the Registrant.
*3.2.  Restated Bylaws of the Registrant.
4.1.  Indenture, dated August 23, 1993, between the Registrant and First Trust National
Association, as Trustee. (1)
4.2.  First Supplemental Indenture, dated August 23, 1993, between the Registrant and First
Trust National Association, as Trustee. (1)
*4.3.  Specimen stock certificate.
*5.1.  Opinion of Shearman & Sterling.
*10.1.  Form of Amended and Restated Stockholders' Agreement, dated            , 1996.
10.2.  Letter Agreement, dated July 9, 1993, among the Registrant, Georges Marciano, Maurice
Marciano, Paul Marciano, Armand Marciano and trusts for their respective benefit.
(1)
10.3.  Employment Agreement, dated March 1, 1994, between the Registrant and Roger A.
Williams. (3)
*10.4.  Letter Agreement, dated January 22, 1996, between the Registrant and Andrea Weiss.
*10.5.  Employment Agreement, dated as of May 14, 1996, between the Registrant and Francis K.
Duane.
10.6.  General Release and Indemnity Agreement, dated August 23, 1993, among Maurice, Paul
and Armand Marciano, their respective trusts, the Registrant, Georges Marciano and
his trust. (1)
10.7.  General Release Agreement, dated August 23, 1993, among Maurice, Paul and Armand
Marciano, their respective trusts, the Registrant, and Georges Marciano and his
trust. (1)
10.8.  Cancellation and Reassignment Agreement, dated August 23, 1993, among the Registrant,
MSKMarciano, Inc., Georges Marciano, Inc. and Georges Marciano. (1)
10.9.  Alameda Lease, dated July 29, 1992, among the Registrant and 1444 Partners, Ltd. (1)
10.10.  Revolving Credit Agreement, dated as of December 20, 1993, between the Registrant and
The First National Bank of Boston, as agent, and Sanwa Bank California, as co-agent,
and the group of financial institution party thereto (the "Revolving Credit
Agreement"). (3)
10.11.  Security Agreement, dated December 20, 1993, between the Registrant and the First
National Bank of Boston, as agent for itself and for certain lenders. (3)
10.12.  Amendment No. 1 to the Revolving Credit Agreement, dated January 20, 1994, among the
parties thereto. (4)
10.13.  Amendment No. 2 to the Revolving Credit Agreement, dated April 1, 1994, among the
parties thereto. (4)

EXHIBIT                                                                                          SEQUENTIALLY
NUMBER                                         DESCRIPTION                                        NUMBER PAGE
- ---------  -------------------------------------------------------------------------------------  -------------
10.14.  Amendment No. 3 to the Revolving Credit Agreement, dated July 18, 1994, among the
parties thereto. (4)

10.15.  Amendment No. 4 to the Revolving Credit Agreement, dated October 24, 1994, among the
parties thereto. (4)
10.16.  Amendment No. 5 to the Revolving Credit Agreement, dated February 13, 1995, among the
parties thereto. (5)
10.17.  Amendment No. 6 to the Revolving Credit Agreement, dated September 14, 1995, among
the parties thereto. (5)
10.18.  Amendment No. 7 to the Revolving Credit Agreement, dated December 22, 1995, among the
parties thereto. (5)
*10.19.  Amendment No. 8 to the Revolving Credit Agreement, dated February 13, 1996, among the
parties thereto.
10.20.  Agreement as to Consignment of Documents and Related Matters, dated December 22,
1995, between the Registrant and The First National Bank of Boston. (5)
*10.21.  1996 Equity Incentive Plan.
*10.22.  1996 Non-Employee Directors' Stock Option Plan.
*10.23.  Aircraft lease agreement.
*10.24.  Employment Agreement, dated     , 1996, between the Registrant and Maurice Marciano.
*10.25.  Employment Agreement, dated     , 1996, between the Registrant and Paul Marciano.
*10.26.  Employment Agreement, dated     , 1996, between the Registrant and Armand Marciano.
*21.1.  List of Subsidiaries.
23.1.  Consent of KPMG Peat Marwick LLP, independent certified public accountants.
*23.2.  Consent of Shearman & Sterling (included in Exhibit 5.1).
+24.1.  Power of Attorney.

- ------------------------

+   Previously filed

*   To be provided by amendment.

(1)  Incorporated  by  reference from  the  Registration Statement  on  Form S-1
(Registration No. 33-69236) originally filed by the Company on September 22,
1993.

(2) Incorporated by reference from Amendment No. 1 to the Registration Statement
on Form S-1 (File No. 33-69236) filed by the Company on November 24, 1993.

(3) Incorporated by reference from the  Company's Quarterly Report on Form  10-Q
for the quarter ended March 27, 1994.

(4)  Incorporated by reference from the Company's Annual Report on Form 10-K for
the year ended December 31, 1994.

(5) Incorporated by reference from the Company's Annual Report on Form 10-K  for
the year ended December 31, 1995.

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors and Stockholders
Guess ?, Inc.:

The  audits  referred to  in our  report  dated March  1, 1996  included the
related financial statement  schedule as of  and for  each of the  years in  the
three-year  period  ended  December  31,  1995,  included  in  the  registration
statement. This  financial  statement  schedule is  the  responsibility  of  the
Company's  management.  Our  responsibility is  to  express an  opinion  on this
financial statement schedule based on our audits. In our opinion, such financial
statement schedule,  when  considered  in relation  to  the  basic  consolidated
financial  statements taken as a whole, presents fairly in all material respects
the information set forth therein.

We consent to the use of our reports included herein and to the reference to
our firm  under the  headings "Selected  Financial Data"  and "Experts"  in  the
prospectus.

KPMG PEAT MARWICK LLP

Los Angeles, California
July 2, 1996