Brand Reputation Recovery Requires Action

Pamela DanzigerDecember 20, 20236 min

Hollywood’s A-listers flocked to Balenciaga’s Fall 2024 fashion show earlier this month in Los Angeles, its first in the city. It was held on South Windsor Street with the iconic Hollywood sign in the background.

Front row seats were claimed by Kim Kardashian, sister Kendall Jenner, Brooklyn Beckham, Vittoria Ceretti, Eva Longoria, Lil Wayne, Tracee Ellis Ross, Sexyy Red and Salma Hayek, accompanied by husband François-Henri Pinault, CEO of Kering, which owns the brand.

Cardi B and Brigette Nielsen modeled designer Demna’s fashions and Nicole Kidman was glammed up in an all-black, off-the-shoulder suit as she took her place as the brand’s next ambassador. A request for comment from the company went unanswered.

It’s been about a year since Balenciaga was sentenced to brand purgatory for oversexualizing children in a campaign featuring kids with teddy bears attired in S&M bondage gear. The company was inexplicitly slow to respond to the controversy, adding fuel to an already roaring fire.

Its reputation in tatters, brand revenues plummeted. Through the first nine months of the year, Kering’s Other Houses, where Balenciaga reports, is down 10%, from $3.1 billion to $2.9 billion, and in the third quarter alone, it took a sharp 19% dip.

“Balenciaga never recovered from the disaster of the advertising campaign of a year ago and the even worse management of the crisis communication around it,” said luxury brand advisor Susanna Nicoletti, who worked as chief marketing officer of Sergio Rossi when Kering owned it. “Its stores are often empty; the brand’s lost appeal.”

Influencers To The Rescue

Balenciaga is counting primarily on its A-list influencers to bring it back from the dead because the fashion it showed probably won’t do it. Its latest show was more an homage to things we’ve seen before rather than brand-new, original-inspired designs. To its credit, the Fall 2024 show dialed back the outrageously oversized imagery from the Summer 2024 collection with more LA-appropriate bodycon looks.

The Cut’s critic-at-large Cathy Horyn called it “creepy and cool,” with the emphasis on the “dark, witchy” side – “Dracula doing his business in daylight” – and the cool coming from the “look or attitude that is exclusive to a special group,” i.e., those sitting in the front row.

The celebrities in the audience got the lion’s share of the press with the New York Times NYT -0.9% reporting “Balenciaga Basks in the Warm Glow of Celebrity Forgiveness.”

But beyond Hollywood, the general public is not so forgiving. The Daily Mail reported “Nicole Kidman is blasted by her fans after she is named the face of Balenciaga.”

And AllHipHop said that various celebrities associated with the brand have lost followers since appearing at the show, most especially Cardi B.

A check on InsTrack found Cardi B dropped nearly 80,000 Instagram followers on December 2 and 3. Then she picked up mid-week, only to tank on the 8th and 9th, dropping almost 180,000 followers. However, the falloff made no dent in her overall numbers, from 169.1 million on December 1 to 168.9 million on December 9.

“Now well-paid influencers lose followers as soon as they put their face close to the brand,” observed Nicoletti, and added,“It’s a risky game,” to rely primarily on celebrities to lift the brand out of the doldrums.

“Balenciaga lost its grip with customers. Its poor brand communication puts Balenciaga at risk of survival.”

While the brand needed all eyes on its fashion, that wasn’t the case. Instead, everyone was focused on the celebrities in the audience.

Fashion Underwhelms

The show was full-on Hollywood, which takes real life, transforms it by magnifying its beauty and dark side, then projects it onto oversized screens.

Demna’s taken-from-life design inspiration is evident everywhere, from the Nike-like oversized sneakers – though how these clodhoppers would perform on the track is questionable – to the Ugg-inspired knee-high boots, Lulumelon-esque leggings and velour tracksuits reminiscent of Juicy Couture. Donatella Versace is referenced with a canary yellow-haired model in a black body suit, and Chanel gets a nod in tweed suiting.

The show concluded with eveningwear designs reminiscent of founder Cristóbal Balenciaga’s originals, which High Snobiety’s Morgan Smith called the show’s best looks. But much of the rest was described as gimmicky.

“There was some kind of Andy Warhol thing going on in me,” Demna shared with Harper’s Bazaar. “I was showing my love for the influence that I got from this city.”

The Erewhon natural foods grocery store was one of the show’s local inspirations. It’s a favorite of the LA cognoscenti for whom Whole Foods is too plebeian. A range of co-branded Erewhon by Balenciaga merch was offered immediately after the show, including ballcaps ($450), aprons ($550), t-shirts ($725), hoodies ($1,150) and polyamide nylon carryalls for $425.

Nicoletti, for one, was not impressed. “When you tap the likes of Nicole Kidman and Cardi B on the same brand, when you show clothes that could be part of Nike and Chanel collections, you’re just playing with style,” she said.

“It was an eccentric and unlikely collection. It was using the ‘Purple Cow’ principle to shock and amaze but without deep storytelling and meaning. What took place in Los Angeles was a clear sign of brand weakness and unclear vision,” she added.

Reputation Recovery

Balenciaga still has work to do to restore goodwill with customers. Being forgiven by Hollywood A-listers isn’t going to do it.

“Influencers who get paid multi-million dollars to endorse your brand will be your best friend as long as the paycheck comes in. They’ll say nice things about you because it serves their purpose,” said Stephen Hahn, global executive vice president at corporate reputation management consultancy Reptrak.

The influencer strategy might help Balenciaga get a quick hit and a short-term bounce, but it’s not a long-term, sustainable strategy,” he added.

Hahn observes that other luxury brands’ provocative advertising has gotten them into hot water before, but they quickly recovered. Balenciaga is not there yet. “Luxury brands are known to push the boundaries by being avant-garde and irreverent. But Balenciaga took it too far.”

It crossed the line between being provocative and being morally offensive. It must reclaim the high ground to restore the brand’s reputational integrity.

Good companies with strong values have reputational equity in the bank. Balenciaga lost some of that. The burden of proof is placed on the company,” he shared.

To restore its reputation, Balenciaga must listen carefully to all the stakeholders in the brand and then embark on a media-relations charm offensive to address their concerns.

“You’ve got to be goody-two-shoes on the catwalk, in the lens of the media, in your stores, and in how you present the brand to the world,” Hahn said. “The burden of proof is on the company. It’s got to take the right steps and tell the story that embraces its humanity and integrity.”

“Hope is not lost,” he concluded. “Balenciaga needs to earn back the benefit of the doubt in the minds of the customers and people who care about the brand.

“It’s not enough to merely double down on sales and marketing efforts – to spend your way to success – because the brand really doesn’t have permission to do that just yet. Earning the benefit of the doubt is not something you can just message about.”

Contributed to Branding Strategy Insider by: Pamela Danziger, Owner, Unity Marketing

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