Guess recovery mode starting with better control of inventory. (Retail).

AFTER a dismal year in which same-store sales fell 4.1 percent, Guess Inc. has launched a new round of cost-cutting measures and revenue enhancers.

One goal is to continue to keep inventories lean at the company, which has $640 million in annual sales. Last year, President and Chief Operating Officer Carlos Alberini instituted an inventory planning and control group that has been successful in keeping stock levels down.

At the end of 2002, the Los Angeles-based designer jeans maker had whittled down inventory to $96 million, flat with 2001 and considerably lower than the $144 million at the end of 2000.

"Managing inventory has become more crucial right now and that is what we are doing," said Alberini, who came to Guess two years ago.

Sales at Guess retail stores have fallen to an average of $340 a square foot annually, versus $430 in 1999. Still, the company plans to open 15 to 20 stores this year to help boost revenues and further expand into children's retailing.

Guess is also revamping its men's wear line, which was introduced two years ago but hasn't done well. In early 2002, comparable sales for Guess men's wear fell 20 percent as customers opted for urban wear such as Ecko Unlimited and surf wear such as Quiksilver.

After retooling the line into a more European look, comparable store sales for men's wear ended the year down only a few percentage points.

Staff reporter Deborah Belgum can be reached at [phone] ext. 228, or at [e-mail].