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Rags brought riches to Guess co-founder Georges Marciano, but now he faces ruin

COLUMN ONE

Convinced that some employees stole from him, Marciano initiated lawsuits that backfired when a judge instead ordered him to pay the accused employees hundreds of millions of dollars in damages.

December 15, 2009|By Harriet Ryan
  • Georges Marciano, right, with business manager Colin Levy in 1998. After leaving Guess in 1993, Marciano turned his attention to real estate.
Georges Marciano, right, with business manager Colin Levy in 1998. After… (Los Angeles Times )

The buses that ferry tourists past the homes of celebrities used to slow to a roll outside a Beverly Hills mansion with 11 Ferraris parked just inside the gates. Georges Marciano lives here, the gawking customers were told. You know, Guess Jeans.

A knowledgeable guide might have gone on to describe Marciano as a classic American success story -- a poor immigrant who amassed a fortune through hard work and business savvy. The guide might have noted Marciano's two other palatial residences on Sunset Boulevard, his Boeing 737, the art collection boasting works by Marc Chagall and Ed Ruscha, the cellar of priceless wines, the homes in Utah and France, and his self-financed if little-noticed campaign for governor.

These days, there is no reason for the buses to stop. The Ferraris are gone. Creditors have laid claim to Marciano's assets. The gubernatorial campaign is dormant, and the great man himself has disappeared.

"I do not know where Mr. Marciano is residing at this time," his spokeswoman conceded recently.

Marciano, 62, cannot blame his troubles on a Ponzi scheme or the mortgage meltdown. He is poised to lose an empire worth as much as $500 million because he is convinced that some employees stole from him.

That his own accountants and law enforcement agencies found not a cent missing has not dissuaded Marciano from persisting in what he calls "a crusade" to prove the allegations. It has been thus far a losing battle.

Lawsuits that Marciano initiated to recover assets backfired when a judge instead ordered him to pay the accused employees hundreds of millions of dollars in damages. Marciano, the design prodigy credited with introducing the world to acid-washed denim and jeans as high fashion, was portrayed during the proceedings as a man unhinged from reality. Reeling from an acrimonious and bitter divorce, he binged on pain medication, pursued women barely out of their teens and, ultimately, made paranoid accusations about those closest to him, according to allegations in court papers, transcripts of testimony and reports by a sheriff's investigator

A self-made man has become, in the eyes of many, a self-destroyed man.

"I do believe it's tragic," said R. Rex Parris, an attorney who represented some of the employees who won libel judgments totaling $425 million against Marciano last summer. "He surrounded himself by people who wouldn't tell him that he was being a jerk, and as sufficient time went by, he started to become disconnected from the world."

Marciano's attorney, who wrote in a recent court filing that his client is living somewhere outside the U.S., disputed the tawdry accusations aired in court. He said sanctions that the judge imposed on Marciano for flouting her orders barred him from presenting his side of the story to the jury.

"Mr. Marciano's forced silence cannot be viewed as an admission of those false allegations, which he denies," Daniel J. McCarthy said in a statement.

Marciano and his three brothers started Guess Inc. in Los Angeles in 1981 after arriving from France, where they had grown up in poverty. Georges dropped out of school at 15 and quickly gravitated toward the garment industry. His design of skintight jeans, zippered at the cuffs and softened by repeated washings with pumice stone, launched the brand. The Los Angeles County Museum of Art named him California's Designer of the Year in 1987. Even after he left the company in 1993, labels and advertisements touted "Guess? by Georges Marciano."

After selling his stake in Guess for $220 million, Marciano turned his attention to real estate. The crown jewel of his properties was the Bank of America building in Beverly Hills, nicknamed the Power Tower for its influential and wealthy tenants. Marciano shared a 20,000-square-foot mansion on Crescent Drive with his wife, Megan, whom he married in 1986, and their four children. The family enjoyed what Megan Marciano would later describe in divorce papers as a "standard of living that had no limits."

"We have dinners cooked by a private chef . . . and watch first-run movies shown by a professional projectionist in the full screening room of the basement of our home," she wrote in a filing in the divorce case. "Money has never been an object."

Marciano, who never lost his designer's eye, assembled a collection of striking objects that would eventually include antique firearms, millions in gold coins, the Ferraris, a $16-million, 84-carat diamond he named for his daughter, Chloe, and enough art to open a small museum.

"He had some of the most beautiful Rockwells I'd ever seen in my life. He loved patriotic art," said Kevin Lipton, a Beverly Hills coin dealer who counted Marciano among his customers. "There are a lot of rich people in this town who have no taste, but this guy had amazing taste."

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