Fashion house Dior has suspended its British creative director John Galliano over claims he racially abused a couple in a Paris restaurant.
Police briefly detained Mr Galliano on Thursday night after the couple accused him of making anti-Semitic remarks. He also allegedly traded slaps with them.
A lawyer for the 50-year-old designer said he denied the allegations.
Dior said it had "zero tolerance towards any anti-Semitic or racist words or behaviour".
The firm's chief executive Sidney Toledano said in a statement: "Pending the results of the inquiry, Christian Dior has suspended John Galliano from his responsibilities."
Mr Galliano took over the creative helm at the company in 1996.
He has been awarded the title of British Fashion Designer of the Year on four occasions.
Making anti-Semitic remarks is punishable in France by up to six months in prison.
"For the moment we don't know what led him to address the couple," an unnamed police source told AFP.
"We don't yet know if they knew each other or not."
Police said the designer had drunk the equivalent of up to two bottles of wine.
"We don't know the precise nature of the incident but Mr Galliano was detained after a couple made a complaint last night," a Paris police spokesman said.
"The level of alcohol in his blood was tested and he was then released. He had been drinking quite heavily."
Mr Galliano's lawyer, Stephane Zerbib, told AFP that the designer "formally denies the accusations of anti-Semitism made against him".
Mr Zerbib said his client would take legal action against those making such accusations.
Thursday night's incident is believed to have occurred on a cafe terrace in the Marais district, which has historic associations with the Jewish community and with the gay community in more recent years.
A "wall of names" memorial was recently installed in the quarter to commemorate the 76,000 Jews deported from France during World War II.