Guess founder, accused repeatedly of sexual misconduct, holds onto board seat in contentious vote
A proxy campaign to drive Guess co-founders Paul and Maurice Marciano off the company’s board over a sexual assault scandal failed to draw enough votes Friday at the L.A. apparel firm’s annual meeting — but the activist hedge fund behind the effort has vowed to continue its battle.
Legion issued its own vote tally saying that only 17% of non-insider shareholders voted to support Paul Marciano. Guess operates more than 1,000 stores worldwide and earned $171 million on $2.6 billion in sales in its last fiscal year, though it’s no longer the trendy brand it once was. The hedge fund argues that the allegations have depressed the company’s stock despite a turnaround led by Chief Executive Carlos Alberini.
That prompted a board investigation that concluded “on certain occasions, Mr. Marciano 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,” the filing said. That allegation was followed by a federal sex trafficking lawsuit brought in October by an aspiring Guess model who says Paul Marciano raped her in 2013 in a Beverly Hills hotel room, where she had met him expecting to discuss working for the company. The unidentified model said she later did test shots for Guess but was never given any work.
Prominent Los Angeles attorney Lisa Bloom, whose firm handled the three new lawsuits, held a news conference that week during which all three models and other accusers spoke. The company said it had tried to reach a “mutually agreeable path forward” with Legion, including a new environmental, social and governance committee and the share buybacks, but was rejected. It also announced the formation of a board committee of independent directors assisted by outside legalGuess stood by its position of renominating the Marciano brothers to the board and said Legion’s campaign is “based on information from the media and from misinformed and uncorroborated sources.