Shares of Guess? Inc. plummeted nearly 18% in trading Feb. 1 after model Kate Upton made allegations via social media of sexual harassment against co-founder, executive chairman and Chief Creative Officer Paul Marciano.
Upton, who has modeled for the Guess apparel brand, posted a Jan. 31 tweet that read: "I'm disappointed that such an iconic women's brand @Guess is still empowering Paul Marciano as their creative director." It was marked with the #MeToo hashtag that has become part of the movement against sexual assault and harassment.
She followed the tweet with an Instagram post that accused Marciano of using "his power in the industry to sexually and emotionally harass women."
Los Angeles-based Guess responded through a Feb. 1 regulatory filing, in which it said Marciano denied any misconduct toward Upton.
The company also disclosed in the filing that it had investigated two other allegations of inappropriate conduct by Marciano, which had been brought forth by an unnamed "entertainment website" in November 2017 and published Jan. 31.
One of the allegations was taken from a publicly available lawsuit filed in 2009 and Marciano denied it at the time, according to the filing. An investigation conducted by the company and outside counsel did not corroborate the plaintiff's claims, Guess added.
The second allegation concerned a model who is quoted anonymously in the website's story and claimed inappropriate misconduct by Marciano in March 2016, which he also denied, according to Guess.
"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 company said in the filing.
Guess also noted in the filing that "concerns expressed by Kate Upton" were not part of the probe because the concerns were only just disclosed, but the company intended to "fully investigate her claims once they are known to determine if they have any merit."
At the close of trading in New York on Feb. 1, Guess shares were down 17.75% at $15.11.
