The European Union has fined US clothing company Guess for illegally blocking cross-border sales in Europe, part of a crackdown against illegal practices blocking e-commerce in the EU. Guess’ distribution deals with retailers restricted them from using the Guess brand names and trademarks for online search advertising and also prevented them from setting the retail price independently.

Retailers were also required to get authorisation from Guess before selling online, while the criteria for such approval was not based on any specified quality criteria. Sellers were also not allowed to sell to consumers outside their authorised areas. This system allowed Guess to partition off certain European markets, resulting in retail prices five per cent to ten per cent higher in central and eastern Europe than in western Europe.

In the 2017-18 financial year, Guess’ total operating income improved by 37 per cent. In the same period of time, its operating margin grew from 2.9 per cent to 3.6 per cent. Guess is on a steady growth track in Asia, notably in China, where it opened 25 new stores in the last quarter. China will in fact be a strong focus for the current financial year, during which the plan is to open 60 stores in Asia.