Although he is not admitting any wrongdoing, Guess co-founder Paul Marciano yesterday resigned as executive chairman of the “global lifestyle brand” after an investigation by a special committee of its board determined that he had “exercised poor judgment in his communications with models and photographers and in placing himself in situations in which plausible allegations of improper conduct could, and did, arise,” according to a filing with the Securities and Exchange Commission.
Marciano and Guess have also reached non-confidential settlements with five people totaling $500,000 over their claims of inappropriate conduct “to avoid the cost of litigation,” according to the 8-K document.
“‘This was a very powerful man whose pattern, according to my clients, was reaching out to women who were aspiring models, getting them very hopeful that they were going to get a job as the next Guess girl, groping their breasts and, when they rebuffed him, of course they didn’t get a job,’ said Lisa Bloom, a lawyer who represented four of the women in the settlements. ‘A person who would do that is not fit to serve. Guess is a company that primarily sells to women and should be making a strong statement condemning his behavior,’” Valeriya Safronova reports for the New York Times.
“The allegations first became public when model Kate Upton said in a Time magazine interview with Eliana Dockterman that Paul Marciano grabbed her breasts during a Guess photo shoot nearly eight years ago. She also says that he harassed her by showing up at hotels where she was staying and texting her inappropriate comments,” the AP’s Andrew Dalton writes.
“It’s disappointing that such an iconic women’s brand @GUESS is still empowering Paul Marciano as their creative director #MeToo,” Upton had tweeted a week earlier.
In the Time interview, “[Upton] said that during a 2010 Guess lingerie photo session, Marciano aggressively kissed her, repeatedly tried to see her in her hotel room and forcibly grabbed a breast,” Chris Woodyard writes for USA Today. “… She was 18 at the time and on her first modeling assignment,” she told Time.
“After I pushed him away, he said, ‘I’m making sure they’re real,’” Upton recalled.
“Ms. Upton had indicated in one of her social-media accounts that she wouldn’t participate in the investigation, accusing the company of hiring a law firm with ties to Mr. Marciano to investigate the claims,” Maria Armental reports for the Wall Street Journal.
“… Guess said in February the investigation would be handled by law firm O’Melveny & Myers LLP. A special committee overseen by independent Guess board members hired law firm Glaser Weil LLP,” Armental continues. “On Tuesday, Guess said in the filing that the special committee working with Glaser Weil presented their findings and recommendation to the board on Thursday and Monday. The filing didn’t indicate what the committee recommended and attempts to reach the company were unsuccessful.”
Marciano co-founded the Los Angeles-based Guess with three brothers in 1981 and owns a 17% stake in the company. He will remain on the board indefinitely and resume his duties as chief creative officer until Jan. 30, 2019, when his current contract expires, Bloomberg’s Kim Bhasin reports. He has been on leave, without pay, since the investigation was announced in February. His brother, Maurice, is succeeding him as chairman.
According to the SEC filing, “investigators interviewed more than 40 people and reviewed approximately 1.5 million pages of documents, including emails, human resources and legal department files, social media messages, video and audio recordings, photographs, travel itineraries, calendar entries, agreements, invoices and financial records,” Lindsay Weinberg writes for the Hollywood Reporter.
Guess’ stock price, which had plunged to $14.58 on February 20 on the initial news, started to rebound in March and closed at $22.39 yesterday after reaching $25.85 on May 21.
“The culture of complacency and tolerance in our industry needs to stop. People know what is going on and have previously accepted it. And we can’t always require the victims to be the ones to speak up and tell their story because the victims only know their one story. The people around in the corporate offices or around the harassers every day know of every time they do this. They’re the ones who need to speak out,” Upton, who has not publicly responded to yesterday’s developments, told Time’s Dockterman.