Guess Inc. and its former president have become the latest in the fashion world to face the scrutiny of Italian tax authorities.
The company said in a Securities and Exchange Commission filing Tuesday that it will “vigorously contest” a $12 million tax assessment for 2008 and 2009 levied by officials in Italy as a prosecutor commenced a review of the actions of three members of its European management team and its former president and chief operating officer, Carlos Alberini.
Alberini, who is now chief executive officer of Restoration Hardware Inc., was the signing officer for Guess’ Italian tax filings during the years covered. He left the company to become co-ceo of Restoration Hardware in May 2010.
Guess said it could face additional tax assessments for 2010 and 2011, resulting in “similar or even larger assessments.”
Deborah Siegel, Guess’ senior vice president, general counsel and secretary, told WWD that only one of the three members of the European management group remains with the company. She declined to identify the individuals or the specifics leading to the dispute. “We do not know the next steps to be taken or the timing involved,” she said.
Because the additional tax amount is greater than 2 million euros, or about $2.6 million at current exchange, the matter was automatically referred to a public prosecutor “who may seek to pursue charges or close the matter,” Guess said. According to Italian law, if charges are brought, they would be against individuals affiliated with the company’s Italian subsidiaries rather than against the company or its affiliates.
Shares of Guess dropped 44 cents, or 1.8 percent, to $24.52 in New York Stock Exchange trading Tuesday.
Calls seeking comment from Alberini at Restoration Hardware’s offices in Corte Madera, Calif., weren’t returned at press time Tuesday. The tax dispute came to light just as Restoration Hardware prepared to float 5.2 million shares at $22 to $24 in an initial public offering. Alberini rose to the ceo post in August after Gary Friedman was ousted as co-ceo over an alleged relationship with an employee and became ceo of the firm’s Hierarchy spin-off.
The fashion world has long been a target of Italian tax authorities, with most designers being cleared of any allegations. The latest to be caught up in a tax probe are Domenico Dolce and Stefano Gabbana. The designers were cleared of tax-evasion charges in April 2011 after a three-year probe, only to see the ruling overturned seven months later. The case was reopened in March and is still pending.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews