G Fashion, the Los Angeles-based apparel and accessories brand founded by controversial Chinese billionaire Guo Wengui, has shuttered its L.A. operations abruptly barely six months after launch. Nearly 100 employees were laid off last week without severance, according to an executive familiar with the matter.
The exiled businessman, who also goes by the names Miles Guo and Miles Kwok, is an associate of former Trump White House adviser Stephen K. Bannon, who was arrested last year on federal fraud charges while aboard Guo’s yacht. (Guo Media contracted Bannon for $1 million in consulting services, according to Axios.)
Guo is also a member of Trump’s Mar-a-Lago, and was planning a fashion show at the resort in June to mark the one-year anniversary of New Federal State of China, a lobbying group he and Bannon created in 2020 with the goal of overthrowing the Chinese Communist Party, said several former employees interviewed by WWD.
While living in China, Guo achieved success as a real estate developer, at one point ranking as the country’s 73rd-richest person. But after being accused of bribery, fraud and money laundering, he fled to New York, settling in a $67 million penthouse at the Sherry-Netherland hotel overlooking Central Park.
Using YouTube and Twitter to lob corruption claims back at the Chinese Communist Party, he cultivated an online reputation as a whistleblower, and built a powerful media empire, including GNews and GTV Media, to express his views.
According to research by data analysis company Graphika reported in The Washington Post on Monday, his network has also become a key platform for spreading disinformation in the U.S. about the Chinese origins of the coronavirus, the safety of vaccines, election-fraud claims and QAnon conspiracies.
All the while, Guo has also apparently been nurturing a love of fashion.
One guest who visited his New York penthouse told The Washington Post in 2020 that Guo “served a rare tea he claimed was worth $1 million a kilogram and gave an impromptu fashion show in which he modeled bright red and yellow alligator-skin jackets.”
When G Fashion launched in December, it promised to be “the new gold standard for luxury fashion — a celebration of expert craftsmanship and cutting-edge style offered through an exclusive membership platform,” according to the pitch received by WWD from Rubenstein Public Relations, which no longer represents the brand. Guo was positioned as the “curator” of G Fashion, and is pictured on the brand website perusing Loro Piana fabric swatches and puffing on a cigar.
He hired as chief executive officer and creative director Kamel Debeche, former head of retail operations for L.A. boutique H Lorenzo, and handpicked the designer collective. It included streetwear designer Ben Taverniti of Unravel Project, Eli Azran of RtA jeans, men’s wear newcomer Doni Nahmias, and fashion veteran Marcella Lindeberg, formerly of K by Karl Lagerfeld, William Rast and Miss Sixty.
When Taverniti exited in early 2021, rock ‘n’ roll jeweler and leather studder Ari Soffer joined, boasting a fan base that included Tommy Lee, Arnold Schwarzenegger and Steven Tyler.
“Only fashion can put everything together: confidence, power, beauty, culture, life, respect and people,” Guo said in a statement at the time of the launch. “Each unique G Fashion collection is an exhibition of state-of-the-art craftsmanship applied to sartorial concepts.”
Various levels of membership offered different levels of discounts on logo leather hoodies ($2,530), joggers ($980) and 14k gold whistle necklaces ($3,250), created in honor of Guo’s whistleblower persona and released in a limited edition of 70 timed to Chinese New Year.
Launched during the COVID-19 crisis that sidelined much of the fashion industry, G Fashion and its street luxe aesthetic, with Gothic lettering and fleur-de-lis motifs resembling another L.A. brand, Chrome Hearts, failed to make much of a splash.
Reached Monday, Debeche, the CEO, wrote in an email that G Fashion “is not closing at all.”
“We [are] just downsizing our L.A. operations to the East Coast, it’s just a new business plan, being close to our factory partners in Europe,” he continued. “And due to our founder Mr. Miles [wanting to be] more involved with our design team.” The brand will keep a handful of employees at an L.A. showroom, Debeche said.
But others claim that inside the organization there has been mismanagement from the start. “The majority of customers were followers of Miles and 96 percent of orders were shipping to G Club members for discounted rates,” said former Director of Operations and Customer Experience Nikki Calhoun, who was laid off on May 14. “What was the path to profitability?”
“I was having a difficult time understanding what the products are, what the logos are, what the brand name meant,” said a former employee involved with design, who spoke on the condition of anonymity because she was required to sign an NDA to receive her final paycheck. “Kamel told me this is a cult, they buy whatever we make, it doesn’t matter.”
Debeche “had no commercial intelligence,” said Calhoun, estimating G Fashion had $4 million to $5 million a month in operating costs, including expensive office equipment, photo shoots (modeling agencies and makeup artists are said to be owed $30,000 payment), $75,000 factory equipment and weekly SugarFish sushi lunches. The brand signed a multiyear lease on a 25,000-square-foot building in downtown L.A.’s Arts District but never moved in.
Guo used G Fashion as his own custom clothing shop, diverting designers and sewers from fulfilling orders to work on his personal projects, from events for his media platform, to traditional Chinese shoes for a ceremony celebrating his late mother, sources claimed. His business practices have been the subject of investigations by the U.S. Securities and Exchange Commission and the Federal Bureau of Investigation, and former employees say representatives from the Department of Homeland Security and ICE, the U.S. Immigration and Customs Enforcement, visited the G Fashion offices in L.A.
There were other wild-sounding irregularities, such as orders shipping to strange names, including a Clark Griswold (after the Chevy Chase “Vacation” film character) in Arizona, said Calhoun.
And despite Guo’s anti-China stance, in an outsourcing error, some products were manufactured there, including underwear and socks. A team had to be hired to cut “Made in China” tags out and sew in “Made in L.A.” tags in their place, sources said.
“The things I’ve seen I’ve not seen at other start-up companies,” said Calhoun, a nine-year veteran of Farfetch, 11 Honoré and other brands, who did not sign the NDA when she left.
She and other employees let go without warning or severance are considering legal action against the company. Some were told G Fashion will be relocating to New York and relaunching under a new name and logo.