Rainbow Retailer Warns Models of AI Impact, Faces Lawsuit Over AI-Generated Likenesses
Fashion retailer Rainbow notified its models in June of the previous year that a significant increase in AI use would lead to fewer job opportunities. Following this warning, models reported observing their likenesses used in AI-generated marketing materials on Rainbow's platforms, often in poses or locations where they had not physically participated. The models experienced a reduction in workdays and some filed a lawsuit, alleging their images were leveraged for AI lookalikes. Rainbow's chief digital officer stated the company is responsibly evaluating AI technologies and acting in accordance with model contracts, while disagreeing with certain reported facts.
Fashion retailer Rainbow informed its models last June that the company anticipated a "huge increase in A.I. use" and that "fewer people will be needed" in the long term. Phil Caraway, Rainbow's studio manager, explained that the company had begun "styling certain products, and generating avatars, with the assistance of A.I."
Models reported experiencing anxiety and anger as they observed the company using AI to create synthetic models, sometimes within view of their workspaces. Concurrently, their workdays at the New York office reportedly began to decrease, leading to unemployment for many. Nearly a year after the initial email, Rainbow has reportedly rehired some models, but many remain without work.
In March of this year, models began noticing marketing images on Rainbow's site, social media, and newsletters that resembled them but depicted different poses or locations than their actual photo shoots. Many suspected these were AI-generated doppelgängers. This led to a series of emails to Rainbow and at least one lawsuit filed by a model, Francheska Pujols.
David Cost, Rainbow's chief digital officer, stated that the company is "responsibly evaluating emerging AI technologies" and is "committed to doing so in a proper manner." He added that Rainbow's dealings with employees and contractors are private, that the company disagrees with "much of the purported 'facts'," and has "acted appropriately and in accordance with its commitments, including contracts signed by models." He declined to comment on specific questions.
The fashion industry, particularly e-commerce, is considered vulnerable to AI displacement, according to a 2025 study by the Worker Institute at Cornell University ILR School and Data & Society, in partnership with the Model Alliance.
Rainbow, founded over 90 years ago in Brooklyn, operates over 800 stores nationwide and is privately owned. The retailer, which also runs the brand KissDon'tTell, targets budget-conscious consumers. For its e-commerce operations, Rainbow reportedly sought models without agency affiliations, often recruiting them via platforms like Instagram, with many having limited prior paid modeling experience. (Source: Business Insider)
