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Fashion Hell: Elie Tahari's $2M "Exile in New Jersey" Headache

It's got all the makings of a cross-cultural PR disaster. A manager for the luxury design house Elie Tahari says he was exiled to New Jersey -- where he allegedly suffered a "breakdown" in part due to the smog, the commute and the "cheesy" stores where he worked -- all because he complained about being passed over for promotion in favor of less senior Israeli executives.

The manager, Thomas Horodecki, has filed a $2 million arbitration claim against the company in which he says he was passed over for raises and promotions because he's Polish and not Jewish. Whatever the truth of the matter, Elie Tahari's management needs to take care of this mess as soon as possible, or risk taking attention away from the clothing where it belongs.

Founded in 1973, Elie Tahari is a privately-held global lifestyle brand with a presence in more than forty countries. Tahari is best known for womenswear, particularly elegant suits, but its eponymous designer (who is a man, in case you couldn't tell from his name) has worked diligently over the past several years to offer shoppers stylish but not overly trendy ensembles that work in both corporate or casual settings.

Tahari has the kind of rags-to-riches story that continues to inspire legions of wannabe fashion designers. A Jerusalem-born orphan, Tahari set his sights on NYC as soon as he was discharged from service in the Israeli army.

Armed with little more than chutzpah, Tahari slept on park benches until he scraped together a business. A big break came when he invented the tube top â€"- a preferred item of clothing for the gyrating denizens of strobe-lit Studio 54 in the 1970s. Tahari now estimates his company is worth about $500 million.

Here's where it gets a bit sticky. It's no secret that there are other Israeli-born employees on Tahari's books. But Horodecki is claiming that his supervisor, Israeli-born Sagit Halperin -- married to the company's head designer Kobi Halperin -- passed him over for less senior female Israeli staffers allegedly because the women all planned to vacation together in Israel.

When Horodecki complained, management promptly dispatched him to Tahari's in-store boutiques at the Hackensack branches of Saks Fifth Avenue and Bloomingdale's, and at Neiman Marcus in Paramus. He was previously based at the Saks flagship in Manhattan.

Far from the Jersey Shore
Even though he was far away from the big hair, bulging muscles and fake-bake tans of MTV's Jersey Shore, Horodecki had a hard time making the transition and began seeing a psychologist and taking Zoloft to combat the depressing effects of dealing with traffic, bad drivers, and "cheesy stores." So he got himself two lawyers and filed the suit.

Other companies have taken measures to ease similar transitions for their employees working in the Garden State. Goldman Sachs recently purchased not one, but two, new private ferry boats which will shuttle some of their operations staff from midtown Manhattan to Jersey City, NJ, just across the Hudson river.

But because the damage is done in Horodecki's case, Tahari's management has to clean up. The fashion industry is notoriously filled with creative divas and as such, brands like Tahari need to take a hard look at HR policies and implement some diversity training on the double. Even though Tahari's a private company, it wouldn't hurt to put its promotion structure in writing, and include precise benchmarks for sales and profit-per-square-foot for its store managers.

Finally, as a global company, Tahari should analyze its business practices across each of the countries it has a presence. It won't be cheap, but getting a clear idea of how staff in far flung parts of the world are interacting with each other and their customers. That's ultimately the key to building a sustainable brand and continuing to cultivate a devoted cadre of chic shoppers.

Image via RunwayDaily
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