Paul Marciano - Co-Founder, Vice Chairman and Chief Executive Officer Nigel Kershaw - Interim Chief Financial Officer, Interim Principal Accounting Officer, Vice President of Finance & Accounting and Treasurer Russell Bowers

Erinn E. Murphy - Piper Jaffray Companies, Research Division Betty Y. Chen - Wedbush Securities Inc., Research Division Eric M. Beder - Brean Capital LLC, Research Division Janet Kloppenburg John D. Kernan - Cowen and Company, LLC, Research Division Jeff Black - Avondale Partners, LLC, Research Division Susan R. Sansbury - Miller Tabak + Co., LLC, Research Division

Good day, everyone, and welcome to the Guess? Fourth Quarter Fiscal 2013 Earnings Conference Call. On the call are Paul Marciano, Chief Executive Officer; Nigel Kershaw, Interim Chief Financial Officer; and Russell Bowers, Chief Financial Officer of North America Retail. During today's call, the company will be making forward-looking statements, including comments regarding future plans and financial outlook. The company's actual results may differ materially from current expectations based on risk factors included in the company's quarterly and annual reports filed in the SEC. Now I'd like to turn the call over to Paul Marciano. You may proceed.

Thank you. Good afternoon, and thank you for joining us today. The total company in the fourth quarter delivered adjusted earnings per share of $0.95, which was at the high end of expectation despite the very fragile Europe economic environment and the challenging North American retail markets. Before we get into the details of the quarter, I want to address a few important issues up front. I've been very disappointed with the performance in Retail North America over the past year. We have taken a hard look at this business, and we're in the process of making some strategic management changes. My top priority is to continue to focus on building an executive team with the combination of new and existing talent. We are bringing on board 2 new top executives: one to head our design who will work directly with me and has a strong background of young female customers for the past 15 years; and another executive for all merchandise in Retail North America who will start within 60 days, and I'm very excited to work with these new team members. Also, we resume the search for corporate COO. These changes would position us better to execute our long-term strategies. North America in the fourth quarter, comp sales for Retail North America went down 6%, which was within the range of expectations. However, traffic trend declined at the end of January and the softness continued into March. We believe that the recent tax change and adverse weather have all contributed to this decline in certain degrees as the recent slowdown was most significant in the cold-weather states. But clearly, product played the biggest role in this decline, I'm convinced about that. For me everything starts with the product and end with the product. We have developed a 3-point strategy to drive the growth in our business: increase our denim offering and iconic style at entry price points; shorten our supply chain calendar; and enhance our remaining [ph] heritage. I strongly believe that the heritage of Guess? is rooted in denim. The Guess? girl who is sexy and young looks to us for iconic and sexy styles. We must be more innovative than ever in our denim design, always pushing for the best fit, the newest washes and the most inspiring print at affordable prices. In the past 18 months, the strategy was focused on driving more sales in higher-priced product category. Today, as a result, we realize that we have excluded the youngest version of Guess? girl who is more price-conscious than ever. This aspirational girl is very important to us, and we'll be increasing our denim offering at $75 to $95 price point versus the majority of what we have now from $108 to $148 of bulk order offering. A few months ago, I took steps to address this, and with the design team we've created the return to iconic jeans wear roots of Guess? for fall of '13. It has received the best reception I've seen in a long time. Our fall advertising campaign, which I just finished, would translate that loud and clear. We also recognize that there are fashion opportunities in the marketplace that we can better capitalize on. The company's risk [ph] was shortening our supply-chain calendar and we'll keep a portion of our future buys open to allow us to react to the latest trend as short as 5 weeks. In Europe, France, Italy and Spain represent 65% of our total business in Europe and as we look back on the fourth quarter, one of the biggest challenge was Southern Europe. We expected our retail business will be soft in November and December. However, due to macroeconomic condition and government austerity measure, retail sale did not improve or expected -- as expected and traffic continued to be down in these 3 countries. We expect the difficult retail environment to continue throughout the summer and also impact our fall/winter wholesale orders. In North and Eastern Europe, that region has a very encouraging sign in the quarter. We were very pleased with the progress we are making in growing Guess? in 2 key growth market, Russia and Germany. Revenue in the quarter were up 105% in Russia for the seventh quarter in a row, while revenue in Germany were up 40% during Q4. Our key long-term strategy is to continue to grow in these 2 regions and reduce reliance on Southern Europe. Over the next 5 years, we see the potential to triple our business in Russia and double our business in Germany. In Asia, our Asian business grew by almost 20% in the quarter, led by the Greater China where revenue increased by almost 30%. Over the past 2 years, we have grown our Greater China business by almost 75%, while South Korea business has grown 25% compound annually over the past 5 years. This region continues to be a priority for us, and we will continue to invest capital there. Japan will be our next step to open business there before Christmas, and we would operate directly as we do in Korea and China. Mexico. In Mexico, our business also had an excellent fourth quarter where we increased our revenue by 38%. We have been operating directly in that country with a JV partner since 2005 and have grown our revenue every single year, including 65% over the last 2 years. We're excited with this momentum and hope to expand in more Latin American countries in coming years. About marketing and e-commerce. Direct marketing continue to be my priority going forward, mainly through in-store events, CMM and social media. We plan to continue our successful global progression with Guess? store #1 in jeans in the world. We have a jeans capture to include watches, sunglass and footwear as well. Our partnerships allow us to capitalize on these global appeal and expose us to this 14 million fan on Facebook, as well as Guess? concerts all over the world in cities like Moscow, Mexico City and Dubai and Singapore coming up. We have made significant strides in social media over the last year as well, especially Facebook. This February 2012, we had 1,000,007 fans. Today, we have 4,000,007 fans. We're also focusing on accelerating growth online by building on a world class omni-channel retail strategy that connects online platform with in-store mobile and social experience. We recently implemented new feature that allow us to fulfill website orders from our stores, as well as other customers' online orders to be picked up in our stores. Our goal is to continue to drive sales to our website and double our direct online business over the next 3 years. Capital investment and cost structure. We will continue to protect our strong balance sheet position as we have done in the last 8 years and manage our expense tightly. In the first quarter, we executed on our plan to streamline our cost structure in both Europe and North America. We are also reducing our stores opening in North America and Southern Europe this year, and we'll focus on improving this performance in our existing stores. While I recognize that there are many challenges ahead of us, I'm very confident on the future growth of the company, and I'm very confident in our brand. Guess? is a well-diversified brand that has deep presence around the world, with over 600 stores in North America, 600 stores in Europe and almost 500 stores in Asia. We have a unique combination of product in our stores with denim, women, men product and a range of accessories, some of the most recognized in the world with our watches and handbags. In closing, I would like to summarize the 4 key strategies that we believe would drive shareholder value going forward. One, aggressively execute the product strategy with today's consumer need in mind. Two, continue to hire key talents for North America to help execute our strategy and drive growth in the coming years. Three, review organizational structure across all regions and globally to streamline and improve productivity in all divisions. And four, restore operating profit growth to protect our strong financial position. Thank you. With that, I will hand over to Nigel to discuss financial performance.

Thank you, Paul, and good afternoon. During this conference call, all of our comments about the fourth quarter and the full fiscal year are on an adjusted basis, which excludes the impact of certain headwind charges. You can find more details of this charges and a full GAAP reconciliation in today's earnings release. Moving on to the results. Fourth quarter adjusted net earnings declined 15% to $81 million and adjusted diluted earnings per share were $0.95, which was down 10% compared to $1.05 per share in last year's fourth quarter. Fourth quarter revenues increased 5% to $815 million. In constant dollars, revenues increased 4%. This includes the impact of the extra week. Total company gross profit for the fourth quarter declined 1% to $333 million and gross margins declined 240 basis points to 40.8%, in line with our expectations. SG&A increased 7% to $213 million, primarily due to new store expansions, while SG&A rate increased by 40 basis points to 26.1%. Operating profit for the fourth quarter decreased 12% to $120 million. As expected, operating margin declined 280 basis points to 14.7%. In January 2013, we recorded a charge related to the settlement of a tax audit for the Italian tax office. This settlement was partially offset by unrelated tax benefits resulting in a net tax charge of $0.10 per share. If you exclude the net tax charge, our adjusted effect of fourth quarter tax rate was 31.1%, slightly up compared to 30.9% in the prior year fourth quarter. Moving to segment performance. In North America Retail, fourth quarter revenues increased 2% to $350 million as slightly higher square footage, the extra week and growth in our e-commerce business all drove the increase, which more than offset the 6% decline in comp store sales in the U.S. and Canada. Operating income declined 34% to $36 million, and operating margin declined 560 basis points to 10.3%, which was in line with our expectation. Compared to last year, gross margins were lower due to higher markdowns, changes to our Canadian pricing and a higher occupancy rate as a result of the negative comps. Our SG&A rate increased mainly due to an increase in store payroll, the impact of the negative comps and higher store asset impairment charges during the quarter. In Europe, fourth quarter revenues increased to $300 million, representing a 3% increase in both U.S. dollars and local currency. Italy and France remain challenging markets for us where apparel shipments into the wholesale channel continue to decline. This was partially offset by growth in newer markets such as Germany and Russia. New store expansions continue to drive retail revenue growth compared to a year ago. For the quarter, overall comp store sales declined in the high single-digits as the sales during the discount period did not materialize to the levels expected in Italy, France and Spain. Operating income in Europe decreased by 6% to $52 million, while -- and operating margin declined 170 basis points to 17.4%. Product margins were lower primarily due to higher levels of retail promotions and the unfavorable impact of currencies compared to the same quarter last year. Higher occupancy and store selling expenses negatively impacted the operating margin as we expand our store base and continue investing for future growth, while lower distribution cost in the current period positively impacted our SG&A rate. In Asia, revenues in the fourth quarter grew by 19% to $84 million, with both South Korea and Greater China continuing to post double-digit top line increases. In Asia, operating profit increased 7% to $9 million, and operating margin declined 120 basis points to 10.5%. Gross margins declined, driven by product and channel mix in Korea, partially offset by more full price selling in Greater China. The SG&A improved slightly due to lower advertising expenses in the quarter. In North America wholesale, fourth quarter revenues increased 26% to $51 million, which included some timing of earlier shipments. Operating profit increased by 37% to $13 million, and operating margin increased 220 basis points to 25.7%. Royalties generated from sales by our licensing partners were better than we expected at $30 million, which represented a 2% decline from the prior year. Operating profit declined 3% to $27 million. To summarize then for the full fiscal year, consolidated revenues were down 1% to $2.66 billion but increased 2% in constant currency. The increase in revenue from expansion of our retail stores in Europe and North America and growth in our Asian operations were mostly offset by negative comparable store sales in North America and Europe and lower European wholesale shipments. Adjusted operating earnings decreased 34% to $275 million. Overall operating margin of 10.3% was down 520 basis points from last year's adjusted operating margins, driven by the negative comp store sales, new store expansion and investments in advertising and marketing. The fiscal year adjusted earnings per share decreased by 30% to $2.15 per share. Now turning our attention to the balance sheet. During the second quarter, we repurchased $140 million of our shares. In the fourth quarter we paid special dividend of $102 million. We the ended the quarter with cash and short-term investments of $336 million compared to last year's $496 million. We did not repurchase any of our shares during the fourth quarter. Accounts receivable decreased 5% over last year to $325 million and decreased 7% in constant dollars. Overall, DSOs improved compared to last year, but the slow payments in Italy continue to be a focus area, and we are managing future shipments very carefully. Inventories increased 13% to $370 million, while finished goods units increased 8%. Most of the unit increase are for the international store growth and expansion of our G by GUESS businesses in the U.S. and South Korea. Although we are not yet fully aligned with projected sales at year end, we have been able to reduce our inventory growth over the last 2 quarters. And now Russ will give an overview of our recent business trends and provide our outlook for the first quarter of fiscal 2014 and full year.

Thank you, Nigel, and good afternoon. As Paul mentioned earlier, we recently witnessed some unfavorable retail trends both in North America and in Southern Europe that we have reflected in our guidance. We have also implemented plans to streamline our operations to generate future savings we expect to fully annualize in fiscal 2015. Our outlook for the first quarter of fiscal 2014 and the full fiscal year exclude any restructuring costs. In North American Retail, we will be opportunistic in store openings and plan to open only 17 stores in the U.S. and Canada during the year. In fiscal 2014, we plan to close 22 stores in the U.S. and Canada as leases expire, all of which are underperforming. So far in the first quarter comp store sales have been down in the low teens, and we expect this to continue for the rest of the first quarter. Even the larger store base, we expect revenues to decline in the mid- to high-single digits. We believe that changes to the product assortment, as well as the increased offerings at entry price points will drive volume improvements in the back half of the year. For the full year, we expect comps to be down in the mid- to high-single digits and revenues to be down at the mid-single digits. In Europe, we are planning to continue to grow in Northern and Eastern Europe, while we expect Southern Europe to remain challenged. So far in the first quarter, retail comps in Europe continue to be down, in line with the trend we saw in the fourth quarter, and we expect this to continue for the rest of the quarter. For the year, we are planning comp store sales to be down in the mid- to high-single digits. We're reducing our store openings and we'll be more strategic as we focus on expanding in key growth areas. During the year, we and our partners plan to open 70 stores, of which 1/3 will be directly operated by us. We plan to close 23 property stores during the year, mostly in Italy, as we redirect capital investments to our new growth markets. In Europe wholesale, we are planning the orders for our Fall/Winter collection to be down in the high-single digits. We are not planning for any notable improvement in the back half of the year as we expect growth in Northern and Eastern Europe to be more than offset by declines in Italy and France. Considering these factors, as well as the timing of deliveries on a larger store base, we expect first quarter revenues to decline in the high single-digits in local currency and in U.S. dollars. For the full year, we expect revenues to decline in the low to mid-single digits, both in local currency and U.S. dollars. In Asia, we expect our growth to be fueled by store expansion as well as existing store productivity improvements. In Greater China, we will continue to partner with licensees to open new stores in the second tier cities. In Greater China, we plan to open 50 doors, including concessions during fiscal 2014, half of which will be directly operated. We continue to see opportunity in South Korea to open more doors, including our G by GUESS brand, and plan to open 45 doors in total during fiscal 2014, of which half will be directly operated. While we still anticipate some softness in the South Korean economy, we will be anniversary-ing these headwinds in South Korea from last year when the economic conditions initially weakened. As we mentioned in our previous earnings call, we are in the process of establishing our team and infrastructure in Japan. We expect our first flagship store to be opened in fiscal 2015 and expect that the initial setup cost incurred in fiscal 2014 will offset some of the profitability improvements in other markets in the region. For the first quarter and the full year, we expect Asia segment revenues to grow in the low to mid-teens. In our North America wholesale business, we expect revenues to be down in the low single digits for both the first quarter and the full year. We expect the launch of our Brazilian operations this year and plan to open 2 flagship stores. We are anticipating that the initial start-up costs will impact the profitability of the segment in fiscal 2014 as we invest in future growth. In our Licensing business, for both the first quarter and full year, we are assuming that royalties will grow in the mid-single digits. For both the first quarter and full year, we expect overall gross margins to decline as the expectation of negative comp store sales in North America and Europe continues to put pressure on our occupancy rate. With respect to operating expenses, we expect a higher SG&A rate for the first quarter, driven by the impacts of negative comp store sales. For the year, we expect the SG&A rate to be flat to slightly up as some of our restructuring initiatives start to impact the cost structure. We are planning the full year with a 33% tax rate, and our guidance assumes foreign currencies remain roughly at prevailing rates. Considering all of these factors, for the first quarter, we expect consolidated revenues in the range of $545 million and $560 million. We are planning an operating margin between 1% and 2% and adjusted EPS in the range of $0.05 and $0.10 per share, excluding any restructuring charges. These expectations would result in full year consolidated revenues between $2.6 billion and $2.64 billion, operating margin between 8.5% and 9.5% and adjusted EPS in the range of $1.70 and $1.90 per share, excluding any restructuring charges. For the coming year, we expect to generate between $220 million and $240 million of cash flow before capital expenditures and dividends. For the full year, we plan to manage our CapEx carefully and opportunistically by investing between $80 million and $100 million in capital expenditures net of [indiscernible] allowances primarily for new stores and remodels. With that, I will conclude the company's remarks and open the call up for your questions. [Operator Instructions] Operator?

[Operator Instructions] Your first question comes from the line of Erinn Murphy with Piper Jaffray. Erinn E. Murphy - Piper Jaffray Companies, Research Division: Paul, I just had a question first for you. If you think about some of the restructuring of the management team and some of those key positions that you highlighted that you're in the process of searching for, I was just curious if you could just be a little bit more specific. You said you're looking for a head of design and then a head of merchandising for North America. I wasn't sure if you already have someone in mind for both of those, or if your time line is specifically 60 days and you're just now starting that search? And then, I guess, in terms of that, what are the key things that you're looking for as you think about that role? And then I have a quick follow-up.

Yes, let me correct that. I said that on the call is the candidate have been selected, have been identified and have been hired. We will make a press release in the next few weeks. But both positions have been filled in, and they will start within 60 days, both of them. One would be head of design, and it would not be head design of men or women. It will be a head of design of all products, it means the total look of the Guess? retail North America. And that will definitely control also the design in Europe as an influence of the brand. So that's one executive. The second one will be head merchant of all categories for North America, and also that position has been identified, candidate has been identified and has been hired. So both of them, within 60 days, will start to work and both of them will report to me. Erinn E. Murphy - Piper Jaffray Companies, Research Division: Okay. It's very helpful. I guess in terms of the COO role as well, it looks like you're now resuming that search. Could you maybe kind of qualify for us what are some of the characteristics you're looking for, for that role? And kind of what will the COO will be tasked with doing?

I will say, for me, the help I need as a COO will be focusing on expertise on global sourcing, logistics systems, of course finance and all -- I mean, having some global experience because we are fully, as you heard, 1/3, 1/3, 1/3 exposure around the world. So that is an important factor for me. But also somebody who understand the culture of the company and the fit of what we still call a family culture in Guess?. Erinn E. Murphy - Piper Jaffray Companies, Research Division: That's helpful. And in terms of timeline for that, Paul, I mean, after you have the COO, I guess what's your timeline for that? And then are there any other key positions in the North American business or even globally that you're still looking for, maybe a little bit below from kind of mid-level management perspective that you're still looking for?

Well, we see where we -- I just mentioned that we are -- one of the key priority will be to look at realignment and restructuring on certain and uncertain synergies between regions. And right now, there are 3 key positions with this one. I mean, the 2 on product and head merchant and then COO, which has been already on for 2.5 months, and I have like at least 4 candidates that I'm seeing with my brother Luis [ph] . And otherwise, priority, that is the big ones. Erinn E. Murphy - Piper Jaffray Companies, Research Division: Okay. And then just a quick follow-up for Nigel or Russ on the guidance of $170 million to $190 million. If we think about -- it looks like you're essentially assuming in Europe a continuation of the weak trends and really no pickup in the Fall/Winter bookings, kind of still down high-single digits. Have the European fall bookings actually closed yet, or is the window still open? Is there any opportunity for that to be better or is this a pretty realistic scenario at this point?

I think I can answer that because I just came back from Europe. I mean, if you are really familiar with what happened within France and Italy and Spain, of course, that's really France and Italy, I think that I could say with comfort to say that you can feel a fear in these 2 countries over the near future of the consumer. You see the they are worried. And I'm talking about the wholesale customers, not the customers in the stores. The stores, we address that. But I feel personally that the customers merchant brand stores are concerned of the very next future this quarter, next quarter about the new tax law, the new VIP in place [ph] has been raised in France and in Italy who are really pushing away the customers. And it's a cascade of the little things that will make them more cautious, more prudent in their buys and more close to the months ahead what they want to buy for the next month and not what they want to buy in 6 months from now. And that is really challenging to deal with. Because on one hand, you cannot blame them, not having any visibility of the economy for these customers. And on the other, you have the product, what do you do, I mean do you cut more, do you cut less. So it's a -- that's where we are with Europe and we have a lot of stores in Europe. So we know how we have a long relationship with our customers. We have, just to be prudent, who we sell to and who have credit and who have the guarantees and insurance and all that. So we want to take a very a prudent approach with France and Italy, especially Italy has a brand-new government again, the last few weeks and we have seen what's happening.

Your next question comes from the line of Betty Chen with Wedbush Securities. Betty Y. Chen - Wedbush Securities Inc., Research Division: Paul, I was wondering if you or Russ can talk a little bit about North America Retail. It sounds like we're refocusing on some entry price point items to better target that aspirational customer. I guess timing wise, when should we expect that? And if that's going to start in Q1 or more so Q2 or second half? And related to that, it sounds like you and the team have already been working on some new denim products, if you can talk a little bit more about that as well.

I will answer that because I'm right in the middle of all of that. For the denim prices, the $79 to $90, I mean, I would say $98, it was a category we had heavily in 2009, 2008, '09, '10. '11 and '12, actual, I'm not talking fiscal. Actual '11, '12, we raised -- I mean we did not raise the price, we shift the balance of SKUs between the 2 that we have much more to go. You have been in our stores many times. We have a lot of $108, $118, $128, $138, $148 and only few SKUs, at $89 and $98, like maybe 9 or at least on 9 SKUs, which was nothing. And the majority was in what I would call premium. And I think the timing does not work for us, and we have to reassess and analyze to say we made a mistake. And we said, "okay". Now what the customer message is, "I love your product, but I would like that but also I would also like to carry some which I can afford myself," and the message was loud and clear. But it doesn't mean we work with under premium at all. We continue that on a much more balance that we had in 2006, '07, '08, '09 and '10. And that's why I think we -- you will see it happening in the next 6 weeks. That you would see product in more details of denim, print denim [indiscernible] between $89, $98 and even $79. We still carry the $118, $128 and $138 absolutely. But we rebalanced the SKU brand between the 2, and have things at the last minute also. Betty Y. Chen - Wedbush Securities Inc., Research Division: And Paul, do you think that opportunity exists in other categories as well, whether it's women's tops or dresses or outerwear?

You are right on. Absolutely, what I just said to denim, I just had meeting again last week with the whole team in design and the merchant and production. We will have -- we have selected few categories, declining few SKUs to be entry price, the message of the customers. The customer decide, we don't decide. We realize certain things you like to see is not the time but to say it's a free spending time, everything is rosy and pink and beautiful. So we are dealing with that. It will be in T-shirts, it will be in shirts, it will be in dresses and look at within 8 weeks.

Yes, Betty, we saw in the fourth quarter, we saw a lot of success in a lot of different categories at our entry-level price points. So that's given us a lot of confidence to expand this in a bigger way going forward. Betty Y. Chen - Wedbush Securities Inc., Research Division: Any specifics you can cite, Russ?

I can. I'll give you an example. If you think -- I mean, that's why I said we have such a strong brand. We have such a brand recognition, and that's for a long time. The minute the customer find the product they want at the price they want, at that moment, which was November, December, I introduced some dresses between $79 and $89, the traffic and velocity of the product was really superstrong, that we -- I didn't develop enough. I mean, I didn't have enough. So why I say that is because I love what we have also the $129, $139, $149. But the velocity was much smaller. The minute we put the $89 dress, which we have regular margin on it and everything, the customer reacted like jumping on it. This was a loud message to us to see we love your brand, give it at the right price to us, we love your brand. Betty Y. Chen - Wedbush Securities Inc., Research Division: And do you think, Paul, to kind of complement of that, we should see some marketing messages whether it's email, social media to...

Betty, absolutely. I'll give you 3 examples. One will be clearly in our website, you're going to see it, and we're going to communicate that loud and clear. Two, it's going to be in a campaign fall which I just finished 10 days ago, which is beautiful, gorgeous, all denim and for back-to-school, which will be in magazine in July 15 and August and September. And three, we do mailers to our customers, our CRM, our loyalty customers, which is by hundreds and hundreds of thousands of mailers, which will have all the current product but with prices on it. These are the 3 big things. Of course, we don't put prices in windows. But we will have some price signing in the stores. We can have -- mentioned that the message is going to be loud, and it's going to be clear with the level of taste that we need for our brand. Betty Y. Chen - Wedbush Securities Inc., Research Division: That's really great. We'll be looking forward to with that. And then a last follow-up if I could. I think Russ you had mentioned that going forward, we're going to be much more opportunistic in terms of store openings in North America, and I'm sorry that I missed the number of closures for this year. And is it possible that there could be additional closures to come and whether the team has identified a potential number of underperforming stores to close in upcoming years?

Yes, so the number of openings is 17, and to put a little color behind that, the majority of those stores, are going to be factory outlet locations. The number of closures, we've got 22 this year. And going forward, we've got another 30, maybe 35 stores that we've identified to likely close beyond this year.

And the 22 closure, just to remind you, are expiration leases and some of them, very few of them kick up close [ph] that we went in some mall that did not perform and we just closing the store because the mall are not performing for us. It' that simple.

The next question comes from the line of Eric Beder with Brean Capital. Eric M. Beder - Brean Capital LLC, Research Division: Could you talk a little bit about accessories? I know that the handbag business was tough for you in the beginning of last year. And what should we think about in terms of watches going forward?

Yes, yes. So the handbag business got a lot better in the fourth quarter in our full price stores. Actually, our full price sales within that segment were up for the quarter, which was really encouraging. We did have lot less markdowns, which is also a good thing. The changes we made by putting more logo in the store and adding more fashion to the line with more balance, it's really starting to work for us in handbags. Watches. Watches was still down in the fourth quarter, but they did improve quite a bit from where they were in the third quarter. So we're starting to get a little bit of momentum there. We got a little further to go than we do in handbags, but we've got a lot of initiatives going forward with jewelry styles, another Tiesto watch and things like that, that we think are going to work working. Eric M. Beder - Brean Capital LLC, Research Division: Okay. And in terms of international, I mean how should we think of both the Japanese and the Brazilian opportunities? Obviously, they are in 2014, but -- how should we look at those going forward?

Yes, this is Paul, Eric. For Brazil, we are right now in location with our team we are there in São Paulo. We will plan to open the first store, I think, in the second quarter. And Japan, we just secured our space, offices and all that. I hope to open, we find one location, which I'm not crazy about, and we plan to open before the end of the year. That's my hope. But we really want to go cautiously in Japan. We were there for many, many years with licensees. And we cleaned up the market over 6 years to let go and cleanup the market. I don't want to start with the wrong step here in Japan. It's such a delicate market. So we will do what is right for the brand in Japan. That's for sure. We establish our team now. We have our headquarter there, and we are going to do like we did in Korea and we're going to go act cautiously, and Korea has been such a success for us. But because in terms of the timing of the events, we established world map, team structure and really market research.

Your next question comes from the line of Janet Kloppenburg with JJK Research.

I wanted to just ask, Paul, as you lower the prices on the jeans assortment, if you could do that with margins that were comparable -- equal or close to the kinds of margins that you were able to secure on the higher-priced jeans, or how you thought we should think about the profitability of the lower-priced product? And also, Russ, could you talk a little bit about the accessory business? It sounds like it's gotten a lot better, which is encouraging, and I'm wondering if it's continuing to trend well here in the first quarter? And I just wanted to ask Nigel about inventories.

Okay, so that's 3 questions. Let me address -- so first is denim. First of all, we are not creating this priced denim. It exists. We just simply enlarge the diversity and the choice for the consumer. And the margin in -- I love the majority, love, it will be in line with the IMU with the profit margin we are planning to. What I'm planning to come do personally is to do some test with products maybe in L.A., which will be small unit but to test the market. Which the margin will not be very high, but the quantity would be also very small so the risk is very small. But if the reaction is very good, I can react immediately and go international being in Peru, Mexico, whether it Colombia or whatever I decide to do with the supply chain. We will have the marketing in place. That I'm very confident. And we're doing -- as we speak, we're doing some product within the store, May 1, which is in 5 weeks. And the margin will be very good, and retail price will be $89, and I'm very excited about.

Okay, great. Good. And Paul, do you feel like the advertising and marketing program, which you and I talked extensively about, do you feel that's now more compatible with the target customer?

Yes, but honestly, and I'm going to be blunt with you, you can do whatever the sizing you want. You can do whatever you want. If you don't have the the product that the customer need, you can just spend as much as you want you will not change anything. And that's the pure...

Okay. In other words, you have to get the product right.

Exactly. At they price that they can afford. They will love to buy maybe higher. But today, it's tougher for everybody. And if somebody believes otherwise, I don't believe it.

Okay. And Russ, is accessory business continuing to pick up here in the first quarter, or is it -- and is that turned soft as well?

Yes, accessories are doing better than how apparel has been doing compared to fourth quarter so far.

Okay. And do you feel like that business has turned, in other words, that you have the right formula in terms of product design and pricing?

I think we can still do better. I think it's starting to turn, but we can do better going forward.

Yes. And if I may add something, Janet. What I just mentioned to you, I forgot to mention during the call, is whenever I'm talking about denim and dresses and skirts to say that we have more offering at entry price, I really believe that also the customer of handbag is looking for a price where the competition is severe in handbags by so many brands up and down, is we need to have also some more entry pricing handbags around the $69, $79 and not like everything at $99, $118 and $128. So that will apply to that as well.

Your next question comes from the line of John Kernan with Cowen & Company. John D. Kernan - Cowen and Company, LLC, Research Division: Just wondering what you think the rightsized store fleet is for each concept in North America? You're now pushing nearly 150 factory stores if we account for the store openings your planning for this year. Yet GUESS by Marciano, G by GUESS and Guess? accessories are still well under 100 stores. So what do we think long-term square footage growth looks like here as you slow some of the smaller concepts?

Yes, starting with the Guess? full price stores, we've got a pretty mature states of stores. There's room for growth. I mean, we've talked a lot about New York City and lower markets like that, but that's where we're going to find it. We're in almost all of the best malls. Factory outlet stores, that's an area that's still growing, and landlords are developing new centers. So a lot of the growth that you're going to see is us following a lot of those new centers, which a lot of them are very successful. G with 85 stores, there is a lot of room to ultimately grow G when we get it right in that moderate space. But for now we're pausing it and we're trying to focus on existing store productivity. John D. Kernan - Cowen and Company, LLC, Research Division: And then shifting to the Licensing business, it seems like accessories, even though you have some momentum to become a more competitive category with everyone trying to become more of a lifestyle brand, what is the long-term growth profile of this Licensing business looks like given how high a return of a business it is for you? When can we expect the licensing business to become a growth business again and what gets it back to total top line growth?

I think that -- this is Paul, about the licensing, when it comes to the 3 big category, which is really the handbag, watches and footwear, the growth that you can expect will be in different divisions depending, of course, with the economy. But being, if its factory, if it's G, which is a price much more appealing than Guess?, if it's Guess? who could also have some little bit lower price than what we have currently, which we stat at the $99 and $109, we might do shoes also at $89, which change the whole picture. So this is -- that also is another store we opened and the licensee stores we opened, for example, I give you a number. Total stores we opened in between franchisees and property stores, we opened 160 stores. Let me give you the right number. Yes, so that's a substantial number of stores. But as you mentioned before, the competition, especially in watches and handbags, has been coming for from all angles being low price, moderate price and higher price went down also of major brand. So we continue to protect our market share. We continue to have an extension on these world of accessories but it's getting crowded.

Your next question comes from the line of Jeff Black with Avondale Partners. Jeff Black - Avondale Partners, LLC, Research Division: Just a couple. On the traffic, could you remind us where we were in 4Q and what kind of traffic trends we're seeing thus far in 1Q? And then on the cost, what have we -- I guess what are we outlining in terms of buckets that we want to attack? What's the overall amount of cost we think we can take out of the business? And what part of that flows into this year? If we can have some help on that, that would be great.

Yes, so Jeff, staring with traffic, it was down in the high-single digits in the fourth quarter. But it's slowed since then. It's been down in the teens so far in the first quarter.

Your next question comes from the line of Jeff van Sinderen with B. Riley.

This is Marcelo [ph] in for Jeff. In your own retail stores, how should we think about promotion levels in Q1 versus last year's Q1? And how should we think about merchandise margins overall?

Yes, so looking at the first quarter, we've been a little bit more promotional than we were a year ago. And we had the similar case in Q4. We gave back a little bit in product margin. But if we look at it at the overall year, we have easy compares starting in the second quarter and especially in the back half of the year. So that's a little bit of an opportunity and a lot of the price changes that we've been talking to, too, are also going to help us manage our markdown rates a little bit, I believe.

And if you -- I mean, I don't know if -- I mean, I'm sure you're in East Coast right now, in 10 days is April 1, we have just again yesterday snowstorm in New York I think. I talked to my brother in Europe right now, they have snow in Paris, in Milan. I mean, the weather have been pushing more and more colder within the year and that doesn't help really the traffic of customers who are looking for Spring/ Summer product when it's snowing outside.

Your next question comes from the line of Susan Sansbury with Miller Tabak. Susan R. Sansbury - Miller Tabak + Co., LLC, Research Division: In terms of the stores that you are going to close, you admit that they are underperforming. Once they're out of the store base, can you give us any idea of what the list is going to be in either in terms of cost savings or elimination of losses or step up in sales per square-foot or something like that? Is it going to be meaningful?

It's -- the stores don't lose a lot of money. I mean, we're talking about $0.01 to $0.02 a share benefit from the close of these stores. It does help our sales productivity number. But again, it's -- you're talking about 1% to 2% on that line. And the closers, they're spread across different concepts also. Susan R. Sansbury - Miller Tabak + Co., LLC, Research Division: Okay. But going back to Jeff Black's question about cost savings, you're going to annualize some cost savings by 2015, can you give us a rough idea whether these are going to be significant or not?

So Susan, when you look at what we've done, it's been a very targeted approach. We've looked at both our North American and European cost structure, and we're focusing on those businesses that are underperforming. So we're going to continue to invest in growth areas like North and Eastern Europe, Asia, we mentioned Japan, Latin America. And in some cases, we may actually redirect some of those resources towards those growth regions. When you look at what we've already executed upon in North America and Southern Europe, essentially, we've protect all of the back office functions. And you're talking about roughly with those specific functions about 5% to 10% of the cost structure. So when you look to the guidance and the outlook we've given, we do have some embedded cost savings in the back half of the year that we expect to achieve. And net we're talking -- the goal here, the way that we look at it is more on an SG&A basis than that. Even with the tough economic conditions, we still -- the goal is still to have the SG&A rate flat to last year. And then on a long-term basis, if are there anymore opportunities, historically, we've been at about 27% SG&A rate. Right now, we're probably about 300 basis points higher, and so the goal in our long-range plan is to get back closer to that 27%.

There are no further questions in the queue at this time. I would now like to turn the call over to Paul Marciano for closing remarks. Please proceed.

Thank you. Thank you, everyone, for being part of this call and which is the beginning of the year, and we look forward to achieve all these goals that we have in mind. And we just finished an executive retreat 10 days ago, and there is one word we walked away with to accomplish this goal we have, it's courage. Courage about to do new things, courage to do decision and what would impact our customers, what will impact our business, what will impact the productivity, what will impact operating growth, and it takes courage either way, one way or another. But we are firmly decided to do that, and we will do that. So thank you very much, and we will see you in 2 months in May for the Q1 report. Thank you.

Yes, thanks.

Thank you for your participation on today's conference. This concludes the presentation. You may now disconnect. Have a great day.