Guess?, Inc. Stock Price Takes a Big Hit on News Accusing Guess Co-Founder of Inappropriate Conduct
Stock shares of Guess?, Inc. (“Guess”), the company which “design[s], market[s], distribute[s] and license[s] one of the world’s leading lifestyle collections of contemporary apparel and accessories for men, women and children that reflect the American lifestyle and European fashion sensibilities,” plummeted 17.8% on February 1, 2018, according to The Motley Fool (“Why Guess?, Inc. Stock Plummeted Today”)
. . . after the clothing retailer’s co-founder was accused of sexual misconduct. Late Wednesday, supermodel Kate Upton took to social media to express her disappointment that Guess is “empowering” company co-founder Paul Marciano as its chief creative director.
‘He shouldn’t be allowed to use his power in the industry to sexually and emotionally harass women,’ Upton elaborated, using the #MeToo hashtag that has come to signify the recent movement to highlight the prevalence of sexual assault and harassment.
See also CNBC’s article (“Guess shares crater as actress accuses co-founder of sexual harassment”) which, among other things, reported that the shares of Guess “. . . nose-dived Thursday, a day after actress Kate Upton called out co-founder Paul Marciano for allegedly using ‘his power in the industry to sexually and emotionally harass women.’”
In early November 2017, an entertainment website notified Guess?, Inc. . . . that it was seeking to post separate allegations that Paul Marciano, [Guess’s] Executive Chairman and Chief Creative Officer, had acted inappropriately toward two women. The website posted the allegations yesterday evening.
Upon being contacted in November 2017, [Guess] immediately investigated the claims with the assistance of outside counsel, and at this time, [Guess] has determined the following: One allegation was taken from a publicly available lawsuit that was filed in 2009. Mr. Marciano denied the allegation at that time, and a contemporaneous investigation conducted in 2009 by [Guess] and outside counsel did not corroborate the plaintiff’s claims. The second allegation concerns an aspiring model who is quoted anonymously in the story claiming inappropriate conduct in March 2016. Mr. Marciano also denies this allegation. To date, the current investigation has not corroborated either allegation, and the Board of Directors has been unable to determine that either accusation has merit.
Through a social media post made yesterday, [Guess] also became aware of concerns expressed by Kate Upton, previously a model for [Guess], regarding prior conduct by Mr. Marciano. Mr. Marciano denies any misconduct toward Ms. Upton. As Ms. Upton’s concerns were just disclosed, they were not part of [Guess’s] current investigation, but [Guess] will fully investigate her claims once they are known to determine if they have any merit. As of today, no specific allegations have been made by Ms. Upton.
Guess Investor and Shareholder Alert – Guess Stock Drops More Than 17%
On the news of Guess and Marciano, the share price of Guess fell $3.26 per share, or more than 17%, from Guess’s previous closing price to close at $15.11 per share on February 1, 2018.
On February 7, 2018, TIME magazine published an interview with model Kate Upton, in which Upton stated that Marciano “assaulted and began harassing her during her first professional modeling campaign when she was 18.” Upton’s interview provided detailed descriptions of Marciano’s alleged conduct, corroborated by at least one witness.
On February 20, 2018, Guess announced that the Board of Directors and Marciano agreed that Marciano would relinquish his day-to-day responsibilities at Guess, on an unpaid basis, pending the completion of an investigation into the allegations of improper conduct.
On this news, Guess’s share price fell $0.96, or 6.18%, to close at $14.58 on February 20, 2018.
Guess Shareholders and Investors
Kehoe Law Firm, P.C. is investigating potential breaches of fiduciary duty by the management of Guess. Guess shareholders and investors with questions or concerns can contact John Kehoe, Esq., (215) 792-6679, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected] for additional information.