Guess Plunges as It Names CEO, Keeps Paul Marciano as Creative Head
(Bloomberg) -- Guess? Inc. co-founder Paul Marciano, who resigned as chairman of the apparel company last year amid a sexual-harassment probe, will stay on as chief creative officer after all.
Marciano was supposed to step down from that role this month, while retaining a seat on the board. Guess didn’t immediately return a request for comment on the change of plans.
The company also said Chief Executive Officer Victor Herrero is leaving the company as of Feb. 2 and will be replaced by Carlos Alberini, who had served as president and operating chief from 2000 to 2010. Maurice Marciano, the current chairman and brother of Paul, will serve as acting CEO until Alberini, currently chairman and CEO of Lucky Brand, leaves his current role.
The shares fell as much as 18 percent to $18.46 in New York Monday, the biggest intraday slide in almost eight months. They had risen 8 percent this year through Friday’s close, after jumping 23 percent last year.
The investigation into Paul Marciano’s behavior concluded that while many of the allegations against him couldn’t be corroborated, he had put himself in situations where such allegations might occur, the company said in a June filing. Among the allegations were claims of “inappropriate comments and texts, and unwanted advances including kissing and groping.”
Davia Temin, whose crisis consulting company has tallied more than 1,000 people, mostly men, accused of harassment and other misdeeds in the last year, said she was surprised the company didn’t have him step down as planned.
“Did they think that no one would notice?” Temin said. In announcing that Marciano would stay on, the company could have made some acknowledgement that it would move forward and change. “There’s a huge opportunity here. Unfortunately, it’s sort of tone deaf what they’ve done.”
According to the June filing, Marciano and Guess also reached non-confidential settlement agreements with five individuals totaling $500,000 to avoid “the cost of litigation and without admitting liability or fault,” the company said.
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