On Jan. 23, the Daily Beast reported the latest lawsuit alleging that Paul raped a model referred to anonymously as “Jane Doe 3” without a condom in February 2013 while she was visiting the U.S. According to the report, 20-year-old Doe 3 met the executive at a Beverly Hills hotel under the premise of discussing being cast in future Guess campaigns before he forced himself onto her.
As a “significant shareholder” of Guess, Inc., Legion Partners wrote a public letter demanding that the company immediately remove Paul Marciano from his executive role. Additionally, the firm requested he be removed from the board or commit that he will not be renominated at the upcoming 2022 annual meeting of shareholders. The firm is also calling for co-founder and brother Maurice Marciano’s removal from the board, following his inability to attend meetings as a result of a serious accident in 2020, as well as his alleged coverup of Paul’s abuse.
“As investors, we are deeply concerned by the lack of good judgment the board of directors of Guess has displayed in continuing to allow co-founder Paul Marciano to serve as a board member and as chief creative officer of the company,” it said in the letter. “As human beings, we are appalled.”
It added that the “continued presence of Paul Marciano on the board and involvement with the company should have been deemed unacceptable when the allegations first surfaced in 2009.”
In January 2021, an anonymous model referred to as “Jane Doe” filed a lawsuit against Marciano and Guess for what she claims was quid pro quo sexual harassment, sexual battery, intentional infliction of emotional distress and false imprisonment. She alleged Marciano sexually assaulted her on multiple occasions, beginning in 2017 after a photo shoot in which he inappropriately touched her, and after which he repeatedly asked her for topless photos and offered her career opportunities in exchange for silence. Then in February 2020, she claimed he forced her to perform oral sex on him during what she thought would be a meeting to discuss new career opportunities.
In 2018, model Kate Upton also accused him of verbal harassment and inappropriate touching when they worked together in 2010. Last year, Eileen Toal, a former employee of a boutique affiliated with the Marciano family, came forward with allegations of sexual assault. The accusations triggered an investigation, which resulted in settlement agreements totaling $500,000 with five individuals who had accused the founder of sexual harassment, as well as Marciano’s resignation from his role as executive chairman. However, the following year, Guess announced that Marciano would stay on as a Guess board member and chief creative officer.
Following the more recent allegations in 2022, Guess Inc.’s insurance carrier sued the company to absolve itself of any responsibility for covering claims related to Marciano.
In response to the latest controversies, Legion Partners sent a letter to the board on Jan. 11 with its demands, to which the board responded with a “tepid commitment to ‘review the formation of a committee’ and to get back to us in the ‘coming weeks.’”
“Anyone who knows the history of the company would find this weak response disappointing but not surprising,” the firm noted.
On Feb. 8, Guess issued a statement responding to the firm’s letter, stating that the accusations were “resurfaced” from 2018, and that the details of the alleged incident came from public information.
“As previously disclosed in 2018, the Guess board established a special committee to investigate, with the assistance of independent outside legal counsel, allegations of improper conduct by Mr. Marciano,” Guess said in the statement. “The special committee, composed of independent directors, conducted a comprehensive investigation, the findings of which were made public in June 2018. Regarding subsequent allegations against Mr. Marciano, the company has strongly refuted these claims and is contesting them vigorously.”
In Legion Partner’s letter, it called attention to the company’s positive projections, attributing success to CEO Carlos Alberini’s strides in optimizing its store portfolio, improving supply chain and logistics, and implementing significant cost savings and profit improvement plans.”
However, the firm noted its skepticism surrounding the company’s trajectory with the siblings still playing a role: “We do not believe that Guess will ever be able to reach its full potential with the persistent overhang of legal, reputational and moral risk that accompanies the Marciano brothers remaining on the board or continuing to serve in any role inside the company.”