Legion Partners Calls for Guess Co-Founders to Be Removed; Guess Responds

Legion Partners Asset Management (Los Angeles) released a public letter to Guess’ (Los Angeles) company board of directors calling for co-founders Maurice Marciano and Paul Marciano to be removed. Legion Partners holds a 2.5 percent stake in the company.

Recently, Paul Marciano was accused of rape in a lawsuit filed against him by a former Guess model who says Marciano “forced her to perform oral sex on him.” Additionally, other complaints about sexual misconduct and harassment were outlined in the letter, some dating back to the 1980s.

“For more than a decade, a pattern of appalling sexual assault and harassment allegations have been made against Paul Marciano, while his brother Maurice Marciano appeared to turn a blind eye as a former Chairman of the Board. Now, new sexual assault and harassment allegations have surfaced against Paul Marciano,” the letter reads, in part. “As investors, we are deeply concerned by the lack of good judgment the Board of Directors of Guess has displayed in continuing to allow co-founder Paul Marciano to serve as a Board member and as Chief Creative Officer of the Company. As human beings, we are appalled.”

Legion Partners goes on in the letter to say that they believe it is the responsibility of the board to “take action” and remove both brothers from the board, as well as removing Paul Marciano from his executive role as Chief Creative Officer. At the very least, Legion Partners says, it wants a commitment that the brothers will not be “renominated at the upcoming 2022 annual meeting of shareholders.”

Guess responded to the letter stating that “Legion Partners has resurfaced information related to one of its co-founders Paul Marciano, the details of which come from public information.”

The retailer’s response goes on to say that several years ago, a special committee comprising independent directors conducted an investigation against Marciano, with findings made public in 2018. “Regarding subsequent allegations against Mr. Marciano, [Guess] has strongly refuted these claims and is contesting them vigorously. The Board will continue to act in accordance with the [Guess’] high standards, including upholding strong internal processes and appropriate Board oversight and review of all related party transactions.”