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.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye