Shares of Guess Inc. stabilized Friday after dropping sharply in the wake of model Kate Upton’s #metoo allegations against Paul Marciano — allegations the executive chairman and chief creative officer firmly denies.
After falling 17.7 percent on Thursday, Guess shares rose modestly in morning trading, before a broad selloff on Wall Street pulled the stock back down. Guess ended down 3.4 percent to $14.60 as the Dow Jones Industrial Average dropped 665.75 points, or 2.5 percent, to 25,520.96.
Investors appeared to be spooked by fears of higher inflation on the heels of wage growth — the Labor Department said the economy added 200,000 jobs last month, while hourly wages grew 2.9 percent compared with a year earlier. Among the other fashion stocks hit with even steeper declines were: Coty Inc., down 4.3 percent to $18.05; L Brands Inc., 3.7 percent to $47.51; Fossil Group Inc., 3.7 percent to $7.48; Urban Outfitters Inc., 3.1 percent to $32.63; Macy’s Inc., 2.9 percent to $24.89, and Nordstrom Inc., 2.8 percent to $47.85.
Inflation, however, would seem to be a much more distant concern for Guess, which is well known for its provocative advertising and still working its way through the allegations against Marciano.
Guess’ stock roller-coaster ride started with Upton’s tweet on Wednesday, which declared, “It’s disappointing that such an iconic women’s brand @Guess is still empowering Paul Marciano as their creative director #metoo.”
But Marciano’s conduct has been under a microscope for some time.
In a filing with the Securities and Exchange Commission, Guess said it was notified that an entertainment web site was seeking to post allegations that Marciano “had acted inappropriately toward two women.”
“The company immediately investigated the claims with the assistance of outside counsel, and at this time, the company has determined the following: One allegation was taken from a publicly available lawsuit that was filed in 2009,” the filing said. “Mr. Marciano denied the allegation at that time, and a contemporaneous investigation conducted in 2009 by the company and outside counsel did not corroborate the plaintiff’s claims.
“The second allegation concerns an aspiring model who is quoted anonymously in the story claiming inappropriate conduct in March 2016. Mr. Marciano also denies this allegation,” the filing continued. “To date, the current investigation has not corroborated either allegation, and the board of directors has been unable to determine that either accusation has merit.”
The filing also said that Marciano denies any misconduct toward Upton.
“As Ms. Upton’s concerns were just disclosed, they were not part of the company’s current investigation, but the company will fully investigate her claims once they are known to determine if they have any merit,” Guess said. “As of [Thursday], no specific allegations have been made by Ms. Upton.”
The model’s allegations, while vague, have spurred others on.
On Instagram, model Miranda Vee replied to Upton’s post and alleged Marciano “sexually harassed” her at company headquarters and then later she was “date raped” by a friend of Marciano’s. Vee said she tried to speak out and signed a nondisclosure agreement after being threatened.
The company did not respond to a request for comment.