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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast