Paris (CNN) -- Days before the fashion catwalk known as the Oscars' red carpet and right before Paris Fashion Week, Christian Dior on Friday suspended designer John Galliano for allegedly making anti-Semitic remarks.
The fashion house said Galliano was suspended from his duties pending the outcome of the case, which also involve assault allegations.
Galliano was arrested Thursday night following an argument in a bar in Paris' Marais district, a prosecutor said.
Police arrested him on charges of assault and making anti-Semitic comments after a couple pressed charges. The designer was taken to a police station, and a test revealed he had a high level of alcohol in his blood, the prosecutor said.
Galliano has been released but may be summoned in the coming weeks. His attorney, Stephane Zerbib, has denied the accusations, the prosecutor said.
Announcing Galliano's suspension, Dior President Sidney Toledano said, "The House of Dior declares with the greatest firmness its policy of zero-tolerance regarding any anti-Semitic or racist statement or attitude."
The London-educated Galliano is famous for his fantastical and romantic designs, which came to the fore when he was named creative director at another French fashion house, Givenchy, in 1995.
A year later, he went to Dior, where he continued to make his mark with sexy designs. Princess Diana was one of the first to wear his designs that year when she appeared in a purple-blue Galliano dress with black lace straps.
Celebrities from Heidi Klum to actress Drew Barrymore have worn Galliano on the red carpet, and last year, actress Penelope Cruz wore a Galliano dress for her wedding to actor Javier Bardem.
Sarah Jessica Parker sparked a trend when she wore a Galliano newsprint dress in her role as Carrie Bradshaw on the TV series "Sex and the City."
CNN's Saskya Vandoorne and Melissa Gray contributed to this report.