Marc Jacobs Says Former Exec Perpetrated $20 Million Fraud

For more than five years, Marc Jacobs International says it was the victim of a $20 million fraud. More details are emerging in the lawsuit and countersuit between Marc Jacobs, his business partner of more than 25 years Robert Duffy, and their former chief operating officer Patrice Lataillade. Lataillade alleged in his suit that Duffy created a hostile work environment by talking about and watching porn on company time (Lataillade specified, for some reason, that it was gay porn), using company funds for personal expenses, and forcing one employee to do a pole-dance for him. Well: Marc Jacobs International has responded with a countersuit alleging that Lataillade was embezzling the company to the tune of $20 million. MJI says Lataillade inflated the company sales figures and hid the true costs of expenses so that he could collect huge bonuses from MJI's parent company, Louis Vuitton Moët Hennessy. The suit says Lataillade perpetrated this fraud by "overstating royalty receivables, understating selling, marketing and administrative expenses, overstating raw materials inventories and failing to write off bad debts." The company also points out that Lataillade was given a salary of $1 million, free private school tuition for his children, an annual family vacation in Paris, and a $10,000 annual car allowance. MJI also allegedly lent Lataillade $60,000 in 2008, which he has yet to repay. The alleged fraud was uncovered after a new director of finance came onboard, and Lataillade was fired. Lataillade's lawyers deny the charges, and point out that the company was audited several times during the period in which he is alleged to have been cooking the books. Even if Marc Jacobs International's allegations against Lataillade are true, one still wonders what kind of financial condition a company must be in for an executive to get away with fraud on that scale for over five years. [WWD, NYPost]


Marc Jacobs Says Former Exec Perpetrated $20 Million FraudBeyoncé says she was going for "iconic James Dean" in her wardrobe choices for the "Crazy in Love" video. And she's worn heels since she turned 13: "I'm wearing red pumps in the video. As a child I trained myself to dance in very high heels. At 13, in Destiny's Child, we were told to wear heels, but at first we couldn't walk in them. We couldn't keep our knees straight. But we learned, and that became the image of Destiny's Child: so young and so glamorous. Now I have a rule that my dancers have to wear their heels when I'm wearing my heels. They say, ‘Please take your shoes off, Beyoncé.' At home, I'm always barefoot. And I have a heavy walk without heels. When they hear me thumping through the house, they say, ‘Oh-Beyoncé's up!'" [W]
Marc Jacobs Says Former Exec Perpetrated $20 Million FraudVersace will be H&M's next guest designer, and the collection will go on sale in H&M stores on November 17. [WWD]
In 2008, Donatella Versace told The Cut of diffusion lines, "I respect everyone who does it. But the reason I didn't do it is because I work very hard to put the Versace line in the luxury section. I think to put the Versace line in H&M would confuse the brand." Bygones.
Marc Jacobs Says Former Exec Perpetrated $20 Million FraudKarlie Kloss shot for Victoria's Secret Pink. It is the first time the 18-year-old model, currently the face of Dior, has worked with VS. [Fashionologie]
Marc Jacobs Says Former Exec Perpetrated $20 Million FraudPhotographer Grégoire Eloy shot backstage at fired Dior designer John Galliano's runway shows fir six years, but he waited until the week of Galliano's trial for allegedly making racist and anti-Semitic comments to two strangers in a café to put the resulting photographs on public show in Paris. Of Galliano, Eloy says, "I think that he had been having trouble psychologically, that he was exhausted, for several years, it was obvious, but no one talked about it." [TDB]
Meanwhile, Azzedine Alaïa says he was offered the job of head designer at Dior. He didn't take it. Alaïa, in the words of reporter Vanessa Friedman, was "flattered, but not about to pursue. The story of what happened with John was a sad story, he said when I asked him, and he didn't want to be part of the next chapter." This would have been, to put it mildly, a surprising choice. Writes Friedman, "here's the thing: Mr Alaia has been perhaps the most vocal advocate of all living designers about the need to change the fashion system, to slow it down, to stop the relentless demand for more collections and more store openings. Years ago he stopped having official fashion shows, and started showing, and delivering to stores, only when he was ready as opposed to when the schedule dictates. And one of the houses that most embodies that continuous pressure is Dior; indeed, when former designer John Galliano imploded, the pressures of the system were cited as major contributing factors...Since I would never under-estimate Bernard Arnault, chairman of Dior (which actually owns LVMH), nor CEO Sidney Toledano, however, this makes me wonder if perhaps the group has some interesting plans to change the way it does business up its sleeve, and will use the new designer as an excuse to do so." [FT]
Marc Jacobs Says Former Exec Perpetrated $20 Million FraudCarine Roitfeld styled Kristen McMenamy for Jean-Paul Gaultier's fall campaign. The former editor of Vogue Paris also styled Chanel's fall ads. [Fashionologie]
Gaultier says of his 1988 single, "How To Do That," of which we are big fans, "I sold around 30,000 records — almost made it to the Top 50, but I think that was my last foray into the music business as a musician. I prefer to dress the stars." [Opening Ceremony]
  • Here's a video of Debbie Harry talking about fashion in 1979. [WOW]
  • Aretha Franklin broke a toe by tripping over a pile of her shoes. She then said, "How am I supposed to match my new Marc Jacobs gown with this wooden blue hospital shoe?" [USAToday]
  • The days of wealthy Chinese flocking to the U.S. and Europe for shopping holidays may be numbered: China is planning to reduce or eliminate tariffs on certain overseas-made consumer goods, including designer items. (Designer clothes and accessories in mainland China can retail for as much as 60% more than they do elsewhere in the world due to taxes and tariffs.) The new tariff system will be in place by October 21. [WWD]
  • The U.K. Advertising Standards Authority has ruled that the Cadbury ad which Naomi Campbell was so upset by — the one which implicitly compared the supermodel to a chocolate bar — is not racist. [Vogue UK]
  • Visitors to Rikers Island jail in New York City who are found to be dressed "inappropriately" will now be issued neon green XXL t-shirts. [NYDN]
  • A male model mistook Joe Jonas for his booker at a party in Milan. [P6]
  • Louis Vuitton held a dinner in Milan at Casa Degli Atellani, the house where Leonardo da Vinci's "The Last Supper" is on view by appointment. [WWD]
  • A 21-year-old newbie model named Karl Morrall was working in a supermarket two weeks ago. Yesterday, he walked in Prada's men's wear show. [Vogue UK]
  • Anyone with $45 and a burning desire for a French braid can now go to the salon at Bergdorf Goodman for that very treatment. [NYDN]
  • Fiona Kotur is doing a capsule collection of two handbags for J. Crew. Each is available for $350-$615 in a variety of materials. [WWD]
  • Guess chairman and co-founder Maurice Marciano will retire on January 28. He is 62. His brother Paul will remain as C.E.O. [WWD]
  • Vogue senior accessories editor Filipa Fino has been fired. Women's Wear Daily's news item originally included the sentence "Sources hinted that Fino's departure could allegedly be tied to some inappropriate behavior on her part," but that has been removed from the online version of the story. Commenters on the site allege Fino was stealing samples. [WWD]
  • A trove of shoe-related archival material is up for auction this week. Women's Wear Daily reports that the papers of Munich-based scholar Karl Friedrich Schoensiegel "include a slew of paintings, transparencies, manuscripts and research books, all shoe-related. The highlight of the collection? 277 watercolors, all by Schoensiegel, which are divvied up by location and era. There are illustrations of ancient Chinese slippers, 15th century Venetian platforms, high heels from Damascus and Assyrian flats covered in amulets — not to mention plenty of riding boots, pumps and royal footwear." The lot, which includes two pairs of vintage Bally and Saks Fifth Avenue shoes and a small trove of "reasonably tame" erotica, is expected to fetch between $40,000 and $60,000. Karl Friedrich Schoensiegel sounds like an interesting guy. [WWD]