Dolce, Gabbana sentenced for tax evasion
- The Wall Street Journal
- June 20, 2013
Models display Dolce & Gabbana's Fall-Winter 2013-2014 Womenswear collection in Milan. Source: AFP
The pair's lawyer, Massimo Dinoia, said they planned to appeal, adding that the case is "groundless." The designers, known for their sexy styles favored by celebrities such as Madonna, Naomi Campbell and Scarlett Johansson, have denied the charges.
The case dates back to 2004, when two of the company's main brands were sold to Luxembourg-based holding company Gado.
Prosecutors alleged that the sale was made to avoid declaring taxes on royalties deriving from the two brands' activities.
Under Italian law, the pair wouldn't go to prison because sentences of less than three years are served with house arrest or community service. Moreover, the designers have the right to appeal the verdict twice, and Italian courts often take years to reach a final decision.
Public prosecutor Laura Pedio dubbed the operation as a "sophisticated tax fraud" and originally asked for a two-year jail term for the duo. If the conviction is upheld, the pair would also need to pay a fine to Italy's tax agency for 500,000 euro ($A715,000).
Over the last five years, Italian tax authorities have ratcheted up pressure on tax evasion in an effort to claw back an estimated 120 billion euro ($A172 billion) a year in unpaid taxes, cracking down in particular on the use by Italian companies of offshore centres to avoid taxes. According to Italian tax authorities, the country lost about 17 billion euro ($A24 billion) in undeclared or under-declared income to offshore centres last year, compared with 11 billion euro ($A16 billion) for 2011, with Luxembourg the leading country used by Italian individuals and companies seeking to hide money abroad. Corporate tax rates in Luxembourg can be close to zero, while they are about 28 per cent in Italy.
While Dolce & Gabbana has emerged as one of the most high-profile cases pursued by Italian tax authorities, Italian authorities have gone after other fashion groups in the past. In 1996, Giorgio Armani received a nine-month suspended sentence and was fined $64,000 for paying off tax authorities in exchange for favorable audits. Mr Armani admitted to having paid the bribes.
Late last year, prosecutors launched an investigation into whether the Marzotto family, a wealthy textile dynasty, and four managers dodged 65 million euros ($A93 million) in Italian income taxes when it sold fashion house Valentino through a Luxembourg holding company in 2007. Earlier this year, the family paid the taxes that the state claimed it owed, but will face a criminal trial later this year. The family and the managers involved have denied all charges.
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Lisa Ho shuts up shop
Fashion designer Lisa Ho is closing down.
Administrators HLB Mann Judd issued a statement on Tuesday announcing the end of the Australian fashion queen’s 30-year reign.
“Despite considerable interest, a sale of the Lisa Ho Group business as a going concern has not been achieved within the sale program.”
Lisa Ho's spring/summer 2012/13 showcase as the Art Gallery of NSW was a highlight of Mercedes-Benz Fashion Week Australia in 2012.
While there were whispers and numerous reports of interested buyers, including Myer and the Apparel Group – owners of the Sportscraft and Saba labels – administrators have been unable to salvage the Lisa Ho business in its entirety and are now closing the remaining stand-alone stores around the country.
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“There is a difficultly in retail at the moment and a lot of other retailers are in a similar position but there was and still is a lot of love for the Lisa Ho brand. We still have parties interested in the intellectual property and remaining stock,” HLB Mann Judd’s Todd Gammel told Fairfax.
“Lisa is working through her own issues. She’s been in discussions with us and she is still interested in getting her brand back.”
“We don’t know where it’s going to get to in terms of the stock so we’ve just got to go ahead with what we can do. We would be trying for everybody to give us a view in the next few days around that so we can see if we can get some of the employees and retail away otherwise it’s going to go through the normal closing down process,” Mr Gammel said.
Sales at the online store, Strand, Elizabeth Street, Chadstone, Bourke Street and Brisbane boutiques are now underway until June 30.
Current stock, bridal and evening wear has been reduced by more than 50 per cent.
“It’s a great chance to buy an iconic piece of Australian fashion. There are now $10,000 gowns being reduced to $3,000,” Mr Gammel said.
Prior to being placed in administration on May 8 with debts of more than $10 million, there were plans for Lisa Ho Designs to be listed on the stock exchange.
Ms Ho started her career at a Sydney market in the early 1980s.
Over the years her designs have been worn by models-turned-mogels Tyra Banks and Elle Macpherson as well as singers Florence Welsh and Nicole Scherzinger. Lisa Ho has been a red carpet staple spotted at numerous film premieres and awards ceremonies both in Australia and overseas.
Australia fashion leaders were saddened by the news.
“Personally, Lisa Ho is a dear friend who I have always admired as she built her fashion brand from a small store at Paddington markets into an iconic fashion label, so it is really devastating to see a fashion pioneer like Lisa fall on tough times,” Harper’s BAZAAR editor Kellie Hush said.
“Like many Australian women, I have loved and worn Lisa Ho for decades as she has always created fashion women want to wear. I know this is not the final chapter for Lisa as she is an inspirational business woman and look forward to seeing what she does next.”
Lisa Ho was unavailable for comment.
Read more: http://www.smh.com.au/business/retail/lisa-ho-shuts-up-shop-20130618-2ofy0.html#ixzz2WrCg7Qre
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