Luxury brand Guess on Friday announced it has formed a special committee of two independent directors to oversee an ongoing investigation into "recent allegations of improper conduct by Paul Marciano," the company's co-founder, who "adamantly denies the allegations," according to a press release.
The investigation is being conducted by law firm of O’Melveny & Myers LLP, and the board has also retained Glaser Weil, LLP to advise the special committee. Shares of Guess plunged earlier this month after model and actress Kate Upton, who has worked for the brand, accused Marciano of sexual harassment via Twitter.
Aspiring model Miranda Vee, who previously accused Marciano and real estate developer Mohamed Hadid of sexual harassment and assault has filed a report against the two men with Los Angeles police, the New York Daily News reported Wednesday, noting that attorney Lisa Bloom confirmed Vee spoke to LAPD officials Tuesday.
Things are only getting worse for Guess, which was already roiled by allegations against its co-founder in a climate that has little tolerance for sweeping allegations of sexual harassment and assault under the rug. Upton in her tweet last week suggested Guess, as an apparel company focused on women, should do better.
Several companies have reacted in various ways lately as sexual harassment claims have surfaced about executives, founders and representatives of their brands. In early December, J.C. Penney discontinued sales of Def Jam Recordings co-founder Russell Simmons's apparel label, Argyleculture, after a second sexual misconduct charge emerged. Later that month, Walmart, Target and Eataly — Mario Batali's retail and restaurant business — cut ties with the chef after his admission of sexual misconduct.
Meanwhile, Signet Jewelers' three retail banners — Jared, Kay and Zales — appear to be losing female customers in light of sexual harassment and discrimination issues at the company, according to a brand assessment study from YouGov BrandIndex last year. Women's perception of the brand and their "purchase consideration" levels are both down, according to a measurement of potential sales revenue.
Lululemon last week ousted CEO Laurent Potdevin over what the company described as improper conduct. Sources familiar with the situation told CNBC it was in part due to a multi-year relationship with a female designer at the company. Some analysts have grown frustrated over that brand's reluctance to be more forthcoming about the allegations against Potdevin, who otherwise was widely seen as a highly effective chief executive.
"My rule of thumb is — the behavior of the brand is the brand," Mark Lipton, graduate professor of management at The New School and author of "Mean Men, The Perversion of America's Self-Made Man," told Retail Dive in an interview last week. He also said that boards need to be more proactive about watching over the culture at their companies.
"Boards need to step up and take on a new role, of stewardship of culture," Lipton said. "It's so related to performance. There's solid research, scholarship coming out of business schools, that the more gender diversity on boards the better, that it goes straight to the bottom line. To me it's 'case closed.'"