Fashion designers Domenico Dolce and Stefano Gabbana have been under investigation in Italy for tax evasion for some time, but now the ongoing scandal —they duo are accused of selling their company to avoid taxes—may lead to fraud charges.

• Luke and Julie Janklow have lowered the price of their West 12th Street townhouse for the second time since listing it for $24.975 million in January. The 25-foot-wide manse, which the Janklows purchased from Andre Balazs and ex-wife Katie Ford for $4.5 million in 2004, is now listed with broker Paula del Nunzio for $17.95 million. [Cityfile, BHS]
• Shire Realty CEO Rena Shulsky has put her penthouse at 812 Fifth Avenue on the market. The three-bedroom co-op, which Shulsky purchased two years ago for $9.23 million, is currently listed for $11.75 million. [Cityfile, PDE]
• Investor Enrique Foster Gittes is at it again. Nearly two months after he dropped the price of his townhouse at 12 East 63rd Street for the third time, he has now decided to raise the price by $2.5 million. The 13,000-square-foot mansion is now listed for $23 million. [Cityfile, BHS]
• Designer Domenico Dolce has closed on two penthouse units at the Annabelle Selldorf-designed "Sky Garage" building. Dolce paid a combined $29 million for the two spreads (with a total of 7,500 square feet of living space) at 200 11th Avenue through an entity called Cinquantotto LLC. [Real Deal, NYP]
• Danielle Staub, one of the stars of The Real Housewives of New Jersey, has listed her home in Wayne, NJ for $1.45 million. [Zillow]

• Bee Shaffer says she has no plans to follow in mom Anna Wintour's footsteps. "I really don't want to work in fashion. It's just not for me. I respect her, obviously, but it's just a really weird industry." She concludes by saying that people who think fashion is life are lame and she'd much rather become a lawyer, thank you very much. [Fox News]
• Charlize Theron appears on the cover of Vogue's September issue. It also touts the fact it's 584 pages, though that's down last year's 798 pages. [Cut]
• Be careful if you spend your days walking around in flip-flops. If you're not, you could pick up a deadly germ and if you happen to cut your foot, the germ will enter your bloodstream and kill you. Enjoy the rest of summer. [NYDN]

• A group of 21 stores on the Lower East Side are coming together to offer a weekend of discounts in honor of the (capsule) trade show that's currently underway. [Pipeline, Cut]
• Modeling rates really must falling: A Hugo Boss model has been charged for taking part in the robberies of 15 gas stations and delis. [NYP]
• Eddie Bauer will survive, after all. A private equity firm is buying the company out of bankruptcy for a whopping $284 million. [BN]
• Rihanna half-shaved her head this week. Exciting! Don't think for a moment, though, it was an original move on Rihanna's part, says an outraged Joe Zee of Elle. [People, Twitter]

• More on the winners and losers—both at the dinner and on the red carpet—at last night's CFDA Awards. [NYT, FWD, Cut, TDB, Pipeline]
• Not surprisingly, the powers that be at Calvin Klein aren't the least bit displeased by the new controversy surrounding their not-so-new ad campaign for the company's jeans line. [Cut]
• Say it ain't so: Britain's Mirror reports Agyness Deyn is "quitting modeling and New York and coming home to concentrate on her acting career." [Mirror]
• Because he's willing to do whatever it takes to ensure you see his movie when it comes out, Sacha Baron Cohen appears in the buff on GQ's new cover. [GQ]

• The giant Burberry sign was illuminated atop its new HQ last night, and a big party at the Palace Hotel followed. [WWD, SF, FWD, NYM, Fashionista]
• Calvin Klein is launching a new scent called "Free," which it most certainly will not be. And Kate Moss also has a new fragrance planned. [WWD, Grazia]
• A company is making "tan through" swimwear! "The fabric allows 80% of sunlight through the bathing suit, so you don't get tan lines." [Cut]

• Mayor Bloomberg has declared Thursday to be "Burberry Day" in honor of the lighting of the Burberry logo atop the company's new HQ at 444 Madison Avenue. [FWD]
• It looks like the Gianni Versace CEO Giancarlo Di Risio will be departing the company after going head to head with Donatella Versace. [WSJ]
• Italian officials have accused Domenico Dolce and Stefano Gabbana of tax evasion, and have threatened the duo with a $1+ billion fine. [Cut]
• You may want to think twice before you try and squeeze into a pair of skinny jeans. They've been known to cause a nerve condition called "meralgia paresthetica," otherwise known as "tingling thigh syndrome." [MSNBC]

• It wouldn't be fashion's biggest night without a bit of drama thrown in to spice things up. Naomi Campbell, Linda Evangelista, and Christy Turlington are reportedly skipping the Costume Institute gala this evening, possibly because Kate Moss was chosen to co-chair the event; meanwhile, Karl Lagerfeld, Azzedine Alaia, and Domenico Dolce and Stefano Gabbana are all staying home, perhaps because Marc Jacobs has "commandeered the event" by buying two tables and dressing Moss, Madonna, and Kerry Washington. [P6]
• The Chelsea Clinton wedding rumors continue: The Boston Globe reports the former first daughter and Marc Mezvinsky may get hitched at Ted Danson and Mary Steenburgen's home on Martha's Vineyard in August, which is when the Obamas will be in town, too. [BG, NYDN]
• Kelly Killoren Bensimon says picking on her has become "the new recession vocation." Sounds about right. [R&M]

• Domenico Dolce and Stefano Gabanna are playing priests in Rob Marshall's new movie, Nine. Yes, that's right, priests. [WWD]
• McDonald's is the official coffee of Fashion Week. Yes, that's right, McDonald's. Free espresso all week, folks! [AdAge]
• Did Saks screw up retail forever when it slashed prices last November? Possibly. [WSJ]
• Istithmar says it has no plans to sell Barneys. [NYT]
• Vera Wang plans to branch out to footwear this spring. [WWD]
• Henry Holland's Grammy dress for MIA earned him tons of attention last night; he's now gearing up for London Fashion Week. [Telegraph, Independent]
• Jason Wu talks about what he has planned for Fashion Week. [NYDN]
• Alexander Wang is introducing limited-edition condoms. They'll be sold at Thompson Hotels and the proceeds go to Planned Parenthood. [NYM]

• Two people very happy this evening: Jason Wu, who designed Michelle Obama's one-shoulder white chiffon gown; and Isabel Toledo, of course, who was responsible for the lemongrass-yellow coat and matching dress that Michelle wore to the inauguration. [NYT, AP, WWD]
• As for Malia and Sasha's outfits—and Michelle's olive gloves—don't go searching for them at J. Crew just yet. The pieces won't be available to the general public until fall. [Reuters]
• Trousergate, fashion's latest catfight: Giorgio Armani has accused Domenico Dolce and Stefano Gabbana of copying his quited trousers; bitchy comments on both sides have followed. [Guardian]
• A first look at Alexander McQueen's new line for Target. [Nylon]
• News flash: There aren't that many blacks on the catwalks these days. [NYT]
• Profits are up at Burberry, but the company is still cutting staff. [WSJ]
• Aretha Franklin's inaugural hat can be yours for $179. [WWD]

• Lily Donaldson, the 21-year-old Vogue cover girl, plunked down $2.2 million on an apartment on Avenue B. Perhaps not coincidentally, she now has about six bars in a three-block radius. [Observer]