Last week marked fashion’s biggest attempted #MeToo comeback to date of an industry executive mired in sexual harassment allegations when Guess Inc. revealed that cofounder Paul Marciano would remain at the company as chief creative officer.
This was a U-turn from just a few months ago when Marciano stepped down as executive chairman and pledged to vacate the chief creative role by Jan. 30 after he was accused of sexual harassment by model and actress Kate Upton and others. The company agreed last summer to pay out $500,000 in settlement to five individuals following an investigation into the allegations against its cofounder, although it stressed at the time that this did not admit liability or fault and was done to avoid the cost of taking the matters to court.
While it will take time to assess the full impact of Marciano’s surprising comeback on shareholders and customers alike, such a move raises the question of whether other companies in similar situations could follow suit once the furor surrounding allegations in question dies down.
Other publicly listed fashion companies in the spotlight include British retailer Ted Baker, whose founder and chief executive officer Ray Kelvin is on voluntary leave while the company undertakes an independent external investigation by a law firm into sexual harassment allegations against him. Kelvin, who has a 35 percent stake in the high street stalwart, has been accused by staffers of inappropriate hugging, touching and sexual innuendo.
Elsewhere, at Nike Inc., Trevor Edwards, the former Nike brand president who was viewed by many as a potential successor to ceo Mark Parker, resigned, while Nike vice president Jayme Martin was fired amid reports in The Wall Street Journal that the two “protected male subordinates who engaged in behavior that was demeaning to female colleagues.”
Outside of the fashion world, some that were caught up in #MeToo scandals have also been trying to revive their careers, with varying degrees of success.
Comedian Louis C.K. started doing shows less than a year later to mixed reviews, with some people walking out, while TV hosts Matt Lauer and Charlie Rose were also both reportedly plotting comebacks, which have yet to materialize.
In Hollywood, Pixar Animation Studios cofounder John Lasseter, who was hit by workplace misconduct allegations last year and put on leave, is attempting to stage the industry’s biggest #MeToo comeback yet, having been hired by Skydance Animation for its top job.
“There is a not unexpected return to rehabilitation or reinstatement by some of the men that have been accused in the context of the #MeToo movement,” said Susan Scafidi, an attorney and founder of the Fashion Law Institute at Fordham University. “I think in part the movement can be a victim of its own success because we are absolutely outraged by the names we remember, but there have now been so many that the public can start to forget.”
She believes that companies in similar situations to Guess will be watching its share price closely. Guess shares nosedived almost 15 percent last Monday following the news, although analysts stressed that this was also in part driven by the announcement that the company was replacing its ceo with a former executive, Carlos Alberini. The shares recovered slightly throughout the remainder of the week, closing at $19.03 on Friday, having opened at $21.54 last Monday.
Marciano owns about 16 percent of the firm.
Those companies willing to reinstate executives accused of sexual harassment or other egregious behavior also risk long-term damage to their reputation if further allegations emerge, according to Scafidi. “It’s a matter of not only watching the share price, but watching what happens to Guess in the longer term because once — shame on the man — twice, shame on the company.”
She added that in the case of Guess, the fact that it made a payout to five women means it will be under increased scrutiny. “Even though the payout was carefully couched in not admitting liability to avoid a lengthy court case, the general sense of the public is that there was at least something there. If Guess, particularly Paul Marciano, were to stumble again it would severely affect the reputation of the company.”
Kelly Charles-Collins, an employment trial attorney and ceo of HR Legally Speaking, said that while in the case of Guess, the firm’s share price will likely bounce back and some customers will forget — if they ever knew in the first place — it’s the employees that could suffer.
“When you bring that person back in, it just makes the employees feel that as long as that person’s high up enough in the company that they don’t matter. It makes them feel devalued. It doesn’t make good business sense,” she told WWD.
“Customers probably won’t know as much about this situation unless they follow it on a day-to-day basis. Clearly the shareholders are probably going to be very upset because the shares fell as soon as the news came out. In the long run, they’ll probably bounce back. Once the news cycle changes people often forget, but those who have to work with him on a daily basis don’t ever get to forget about it.”