Guess Activist Investor Calls For Removal of Marciano Brothers

Legion Partners Asset Management, which owns about 2.5 percent of the business, sent a letter to the board Monday, arguing that Guess remains at risk while co-founders Paul and Maurice Marciano are still involved, according to a statement released Tuesday. 

The Marcianos founded the denim apparel brand in 1981. In recent years, Paul Marciano has been accused of sexual misconduct by several women, including a former employee and the model Kate Upton. Marciano stepped down as the company’s executive chairman in June 2018, and the company opened an investigation. It eventually reached a settlement of $500,000, but Marciano was reinstated to the board in 2019, and still serves as the company’s chief creative officer.

”We do not believe that Guess will ever be able to reach its full potential with the persistent overhang of legal, reputational and moral risk that accompanies the Marciano brothers remaining on the Board or continuing to serve in any role inside the Company,” Legion Partners wrote in its letter.

The investors wrote that new allegations have surfaced since Marciano was reinstated to the board. In January 2021, a model filed another lawsuit against Guess, accusing Marciano of sexual assault in an incident in February 2020. The investors also wrote that Guess’s insurance carrier recently sued the company to absolve itself of any obligation in covering claims about Marciano’s alleged behaviour.

Guess has previously denied allegations against Marciano, telling BoF last month that it “refutes these claims fully and is contesting them vigorously.”

The company did not respond to a request for comment.

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