Another December, another fashion month? Over the course of two weeks, Dior Men is showing in Cairo, Chanel in Dakar and both Armani Neve and Pucci in St. Moritz. But while far-flung locales are par for the course when it comes to destination fashion shows — clients spending six-figures a year practically demand to be whisked halfway across the globe — there’s one destination they keep returning to time and again.

This year alone, Louis Vuitton, Ralph Lauren, Dior Men and Alexander Wang have all put on shows in Southern California — primarily in Los Angeles, the centre of the entertainment industry, whose red carpet culture is an increasingly important marketing tool for fashion brands. The city is also a homebase for many fashion industry-adjacent creatives, who consult for the likes of Celine or Tom Ford, or one of the dozens of mass-market companies based here, including SKIMS and GOAT. Celine’s Hedi Slimane famously set up a studio here when he was designing Saint Laurent.

Slimane, who joined Celine nearly five years ago, has shown in Los Angeles before. But he, too, couldn’t resist its perennial allure. On Thursday, he’s back to unveil Celine’s Fall 2023 womenswear collection, months ahead of rivals, at the Wiltern, a live music venue housed in an Art Deco landmark that sits at the corner of Wilshire Boulevard and Western Avenue, a grimy, but rapidly developing, area of town. (The show and still-under-wraps musical performances will mark the first time Celine has welcomed a live audience to see a womenswear collection since before the pandemic.) Showing in LA is a no-brainer at this time of year especially, when stylists are gearing up for awards season, which starts Jan. 10 with the Golden Globes’ controversial return to prime time television after entertainment industry publicists boycotted the event. Even luxe athleisure brands like Brunello Cuccinelli are getting serious about celebrity dressing. (The purveyor of Italian cashmere puffers is hosting a cocktail before the Celine show on Thursday to introduce editors and stylists to its latest formalwear collection.)

LA makes it easy to do something memorable. There are plenty of architecturally significant, made-for-social-media venues, and a built-in audience of high-profile customers, celebrities and image makers. (Gucci, for instance, got great reviews when it transformed the Hollywood Walk of Fame into a runway — and plenty of press mentions for casting child star Macaulay Culkin.) It’s also a place people never seem to grow tired of visiting. For the ever-shrinking, but still-existing, cadre of editors who are flown out to attend such events, LA is an attractive proposition because they can often tack on unrelated work. And of course, the US market remains a huge priority for luxury brands, even as spending slows.

All those terribly practical reasons for staging a show in LA could make it harder to drum up excitement down the road: the industry is addicted to newness. But for now, LA remains a California dream for fashion brands.

What Else to Watch for This Week

Monday

Fashion Awards

Eurozone reports retail sales for October

Tuesday

Chanel show in Dakar

Stitch Fix, Signet Jewelers report quarterly results

Wednesday

COP15, the United Nation’s biodiversity summit, kicks off in Montreal

Eurozone reports Q3 GDP

Thursday

Celine show in LA

Lululemon earnings

Pucci St. Moritz “Experience” begins

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.

Spray paint on stores. Slashed and burned products on social media. Accusations of promoting pedophilia on cable news.

This week, the risks of Balenciaga’s edgy approach to marketing became painfully clear — as did the errors of the company’s initial response to the crisis — as public outrage and confusion in response to the brand’s ads featuring children posing with BDSM-inspired teddy bears reached a scale not seen in the fashion industry since Dolce & Gabbana’s 2018 meltdown in China.

Late Friday, Balenciaga’s leadership issued personal apologies and said the company would drop a planned lawsuit against two external partners who had worked on its campaigns.

“I want to personally apologise for the wrong artistic choice of concept for the gifting campaign with the kids,” the brand’s creative director Demna said on Instagram. “I want to personally reiterate my sincere apologies for the offence caused and take my responsibility,” chief executive Cédric Charbit added.

The moves came after previous statements apologising for the campaigns had failed to quell the outcry. Though no major retailers have pulled Balenciaga products, by the end of the week, at least two Balenciaga stores — in key locations including LA’s Rodeo Drive and London’s Bond Street — had been vandalised and videos featuring people destroying the brand’s products circulated on TikTok.

What went wrong, and can Balenciaga get back on track?

What happened?

On Nov. 16, Balenciaga posted a holiday gifting campaign shot by Gabriele Galimberti, a photographer known for having subjects pose alongside collections of personal objects such as toys, guns and medicines. Balenciaga’s campaign featured children posing in bedrooms alongside spreads of the brand’s products spread out like toys. After a short period of positive buzz, the ads began to draw angry criticism for accessorising the children with the brand’s S&M inspired teddy bears in the intimate set-up, sparking accusations that Balenciaga was sexualising children.

The backlash grew as some social media users claimed to have found pedophilic messages embedded in another, separate campaign for Spring/Summer 2023 published weeks before, which featured Isabelle Huppert in an office scene. A legal brief spilling out of the actress’s bag turned out to be a Supreme Court decision regarding child pornography. A name on a fake diploma appeared to match that of a convicted abuser, and a book on the desk was about Michael Borremans, an artist whose works have depicted mutilated children’s bodies.

A Tweet slamming the campaign went viral, particularly in right-wing social media circles where QAnon conspiracy theories are popular. On Nov. 22, the story was picked up by Fox News commentator Tucker Carlson, who accused the brand of openly promoting child pornography and sex with children. (Balenciaga says it condemns all abuse of children). Meanwhile, on the other side of the political spectrum, fashion news Instagrammers Diet Prada, known for its left-leaning callouts, condemned the holiday gifting shoot.

On Nov. 23, engulfed by a backlash on both sides of America’s political divide, Balenciaga apologised and pulled the campaigns, acknowledging in a brief statement that the teddy bears should not have been featured with children, and saying the company would “take legal action against the parties responsible for creating the set and including unapproved items.”

On Nov. 26 the brand offered a more detailed apology, after key brand ambassador Kim Kardashian addressed the scandal, saying she would “review” her relationship with the house. The brand cited “grievous errors for which Balenciaga takes responsibility” and took “accountability for our lack of oversight and control.” The brand condemned child abuse, promised to review its approval processes and said it was exploring plans to support children’s rights organisations.

Still, regarding the campaign featuring Huppert, Balenciaga said it would continue with its legal action alleging “reckless negligence” by third-parties involved with creating the images, which a complaint seeking $25 million in damages later revealed to be production company North Six and set designer Nicholas Des Jardins.

The apologies failed to calm the fury. Instead, online outrage boiled over into real world acts as stores were vandalised, though no retailers have said they would drop the brand.

Could things have gone differently?

Balenciaga’s response to the crisis was less than ideal in terms of speed and messaging, communications experts said. First Balenciaga was slow to provide a substantial response: a more complete apology, explanation and action plan than the brand’s initial statement would have been more effective on the first day of the crisis. By waiting days to more fully address the issue, the brand risked appearing like it wasn’t taking the campaign backlash seriously.

To be fair, the backlash was complex and unfolded in stages, making it harder to craft a stronger response. But Balenciaga’s multi-part apology only gave the crisis more oxygen, extending its newsworthiness. So did the brand’s legal action, which many in the industry saw as deflection.

Indeed, the legal complaint became a key blunder in the brand’s response: Balenciaga appeared to try and avoid taking full accountability for its central mistake — posing children with sexual objects — by defending itself from what it saw as unjustified attacks inspired by its more easily forgivable slip-up with the Huppert campaign: its failure to do exhaustive sensitivity checks on every object in a complex set design. In short, portraying itself as a victim of its contractors’ negligence detracted from the brand’s credibility when saying it was taking responsibility for the incident. “The brand appeared to be saying “not our fault,” crisis communications expert Mory Fontanez said.

Balenciaga also failed to sufficiently explain the intention behind its gifting campaign — and what, specifically, went wrong. “There’s a lot of fear around admitting with vulnerability the truth about the process,” Fontanez said. But being seen as incompetent may have been preferable to being seen as a proponent of child pornography. By explaining more fully its creative brief and process, Balenciaga might have reassured more consumers who were willing to see the issue as a misstep rather than something more malicious.

Where does Balenciaga go from here?

Apart from the apologies issued by Demna and Charbit, Balenciaga appears to be keeping a low-profile while it waits for the news to die down. The brand has abandoned plans to appear at several high-profile events, including BoF VOICES 2022 gathering and the upcoming Fashion Awards, while it says it is “closely revising its organisation.”

In Charbit’s statement Friday, the CEO said it had nominated an “Image Board” responsible for evaluating content including “legal, sustainability and diversity expertise” as well as hiring an external agency. No personnel exits were announced, but the company said it had “reorganised [its] image department to ensure full alignment with our corporate guidelines.”

But putting in place a culture that better takes public sensitivities into account, all while keeping up the volume and velocity of marketing that social media demands, could be challenging for Balenciaga, which has staked its success under creative director Demna on sparking controversy with designs and marketing that willfully push the limits of acceptability. The brand has sold destroyed sneakers and bedazzled platform Crocs, fuelling the kind of debate that drives social media algorithms. The brand has waded into riskier waters, too, marketing leather trash bags on models that appeared to reference refugees and casting rapper Ye to open its spring-summer 2023 runway show even as the entertainer was facing criticism for incendiary statements.

It’s still unclear how much of a hit Balenciaga’s sales could take from the crisis, or how long it will take for the uproar to eventually subside. The backlashes faced by brands like Gucci and H&M over insensitive products and campaigns were relatively short-lived, although Dolce & Gabbana faced a longer road to recovery after issuing advertisements that appeared to mock Chinese people, spending millions on marketing before sales recovered. (As of 2021, revenues were still below 2018-2019 levels, despite growing 20 percent year-on-year, the privately-held company said).

Shares in Balenciaga-owner Kering closed the week up 4 percent compared to a 1 percent increase in the Stoxx 600 index. While TKTKT, investors appear to be betting that the overlap between outraged netizens and the brand’s actual customers is relatively small, and that the damage to fast-growing Balenciaga’s desirability will be both muted and relatively short-lived.

At stores in London and New York on Thursday, Balenciaga stores indeed appeared to be operating normally, with similarly-sized queues as seen at neighbouring boutiques. Multi-brand retail sources, however, said demand for the brand has declined sharply, with some sellers receiving angry messages from customers and requests for reimbursement. That the scandal has coincided with the key holiday shopping season only makes matters worse. Even consumers who choose to forgive the brand may see its products as awkward Christmas presents.

“This is the nth example of how potentially dangerous this new era of frequent and two-way communication has become for fashion and luxury goods brands…[which] need to introduce safeguards and controls to make sure their messages are well received,” luxury analyst Luca Solca said. However, Balenciaga’s apologies “should produce good damage limitation,” Solca added.

Additional reporting by Malique Morris and Rachel Deeley.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

H&M cuts 1,500 jobs as inflation hits demand. The Swedish fast fashion giant is the first big European retailer to announce layoffs in response to the current economic headwinds.

As Intermix changes hands again, brands seek payment. The contemporary retailer, which was sold by Gap to private equity firm Altamont Capital Partners in 2021, has signed a deal to be acquired by Regent, another private equity firm, after failing to pay vendors for fall orders.

Lanvin Group prepares for IPO. The Shanghai-based company is preparing to list on the New York Stock Exchange before the end of the year via a SPAC deal, in a bid to build a financial war chest that will support efforts to turn around its existing brands and fund future acquisitions.

Everlane secures $25 million loan from Gordon brothers. The investment firm historically specialised in liquidating the assets of bankrupt retailers, but has expanded into financial services and brand management in recent years. The moves comes after Everlane secured $90 million in financing in September.

Primark to invest €100 million in Spain, hire 1,000 employees. The clothes retailer will open eight new stores throughout the country. Last week, it announced plans to invest a similar amount in its store footprint in the UK.

Fear of God to open next chapter with large-scale fashion show for fans. The move is part of a growth push that includes opening the brand’s first flagship and expansion into women’s footwear and accessories, founder Jerry Lorenzo said at BoF VOICES.

THE BUSINESS OF BEAUTY

Report: Natura working with Bank of America, Morgan Stanley on stake sale for Aesop Unit. Natura had earlier preferred an initial public offering for Aesop, but is now leaning toward a minority stake sale because of the unfavourable equity markets, according to people familiar to the matter.

Playa Hair Care founder sues Morphe and General Atlantic. Shelby Wild alleges plans to grow her line were sidelined soon after it was acquired as General Atlantic’s beauty incubator ambitions faltered.

PEOPLE

Ludovic de Saint Sernin to design Ann Demeulemeester. The brand is targeting a turnaround under owner Claudio Antonioli, who acquired the label in 2020.

Sidney Toledano named as president of the Chambre Syndicale de la Haute Couture. The chief executive and chairman of LVMH Fashion Group was elected to lead the Fédération de la Haute Couture et de la Mode’s haute couture body for a two-year term.

Report: Prada turns to ex-Luxottica CEO Andrea Guerra to ease succession. Prada is putting the final touches to a deal to hire the 57-year-old manager, who earlier this year stepped down as head of the hotels division at luxury goods giant LVMH, according to someone familiar with the matter.

Supreme creative director Tremaine Emory to guest design for Dior. The luxury brand will reveal a new capsule collection guest designed with Denim Tears, the label founded by Emory in 2019, during a show at the Grand Egyptian Museum in Cairo on Dec. 3.

Asos continues with finance chief search, interim CFO to leave. The group had already been searching for a new CFO after Mat Dunn stepped down on Oct. 31. It said on Friday that Interim CFO Katy Mecklenburgh will work out her notice period of six months after she was named CFO of Softcat.

BoF wraps up VOICES 2022 with celebratory gala. After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a star-studded gala inspired by the underground art scene parties of 1960s New York.

MEDIA AND TECHNOLOGY

Farfetch stock plunges following 2023 forecast. Shares ended at an all-time low Thursday as the online luxury marketplace outlined the cost of unlocking revenue from new retail partnerships.

Compiled by Rachel Deeley.

Subscribe to the BoF Podcast here.

Background

The first three sessions at BoF VOICES 2022 tackled issues inside the fashion industry and far beyond. Speakers explored the climate crisis and accusations of corporate greenwashing; the potential of artificial intelligence and the associated ethical implications; the war in Ukraine and growing economic uncertainty and inequality across the globe and Gen-Z’s rising anger over these issues and how to start to fix them.

“At this event, fashion is often quite marginal,” said BoF editor-at-large Tim Blanks during the live recording of “The Best of VOICES With Tim Blanks.” “It’s in our minds, but what we’re talking about are the world’s big, definitive issues.”

Blanks was joined by VOICES speaker Ziad Ahmed, chief executive of JUV Consulting and Stephanie Simon, the former head of community at Clubhouse, to reflect on the highlights from the first two days of talks and panel discussions.

Key Insights

• The climate crisis is the cloud that hangs over everything, from technology to the economy. But rather than waiting on private companies to create change, “it seems much more straightforward to mandate the targets that we’re going to need in order to ensure progress from a climate change perspective,” said Simon.
• The potential of artificial intelligence is limitless, but humans can help control how the world of AI unfolds. “We teach AI by example,” said Blanks. “By being ethical, kind human beings, AI learns to be ethical and kind.”
• While the younger generation is interested in new technologies, there’s also a trepidation about the companies and people creating these innovations and a desire to upend past practices. “There’s often an assumption that Gen-Z is leading the charge towards innovation,” said Ahmed. “Broadly speaking, that’s not really the case. A lot of young people are really sceptical and critical about our own relationships to technology.”
• To see change, today’s stakeholders need to bring the next generation into the decision-making process — and begin to relinquish control. “The solutions to the problems that we are facing exist,” said Ahmed. “The question is if the people who currently have the reins will give them up.”

Additional Resources

• BoF VOICES 2022: Finding Optimism in an Unsteady World: From the Ukraine War to the climate crisis to the legacy of the pandemic, speakers including CNN’s Clarissa Ward, Mercy Corps’ Tjada D’Oyen McKenna, Goldman Sachs’ Tim Ingrassia and Google X’s former chief business officer Mo Gawdat discussed the uncertainty gripping the world — and why there’s cause for hope.

Viva magenta, a red tone, will encourage optimism and allude to the rise of the virtual world as well as technology such as artificial intelligence in the months to come, Panton said in a statement.

“We are creating a dynamic world that encourages experimentation, one that leverages the virtual within the physical realm and emboldens our strength and spirit to explore groundbreaking possibilities,” said Laurie Pressman, vice president of the Pantone Color Institute.

The release of the colour is accompanied by an immersive experience called the “Magentaverse,” a collaboration between Pantone and ARTECHOUSE, an art exhibit space. It will be on display in Miami starting December 3 as part of Art Basel Miami Beach.

Learn more:

From Tiffany Blue to Louboutin Red: The Power of Owning a Colour

Just a handful of luxury stalwarts are so synonymous with a colour that consumers can instantly equate the shade with the name. So, how does a brand own a tone, and should smaller labels try?

Intermix, the multi-brand retailer that trades primarily in contemporary and entry level-designer fashion, is changing hands once again after being sold by Gap Inc., to private equity firm Altamont Capital Partners in 2021.

The new buyer is Regent, another private equity firm, but one that specialises in retail, with investments including Club Monaco, Escada, La Senza and Sassoon. WWD first reported the news, which has been confirmed by BoF. The terms of the deal were not disclosed.

On Wednesday, a large percentage of the Intermix staff was furloughed, according to one employee, while others were terminated.

A representative for Intermix did not immediately respond to a request for comment.

The fate of Intermix has been in question for several weeks, when brands stopped receiving payment for shipped orders. Internally, management — including Altamont and interim CEO James Rushing — insisted that the company was not planning to file for bankruptcy protection, but did not communicate their plans to staff until this week.

Rushing replaced another interim CEO, industry veteran and Intermix board member Karen Katz, who stepped in after the exit of Jyothi Rao in May. However, Katz resigned in November after the board failed to find a permanent replacement for Rao. (Katz did not immediately respond to a request for comment.)

According to multiple sources, brands that were not paid for merchandise — which has also not been returned to them — have yet to be told whether they will receive payment for those goods. October was one of the company’s worst months since the pandemic rebound, as fashion brands in the US have struggled as inflation and layoffs have squeezed discretionary spending on apparel. (While many brands and retailers will post gains in 2022, the fall has been down almost across the board, according to multiple sources across the fashion and luxury industries.)

But Altamont’s bet on Intermix was a risk from the beginning. While luxury e-commerce boomed at the height of the pandemic, it has slowed as discretionary spending shifted to physical stores, and also back to experiences. Intermix has benefited from maintaining a significant physical footprint — nearly 30 stores — and being known for selling what is colloquially called “going out clothes” — or dresses, tops and jeans good for partying, which have regained relevance as people get back to socialising.

However, the amount of investment Altamont would need to make in order to accelerate online growth was too big, according to sources. (At present, Intermix generates about $250 million a year in sales, according to a source.) Competition in the online fashion market has never been more intense, and retailers from Farfetch to Net-a-Porter to Matchesfashion have had to make changes to their strategies in recent months in order to attempt to keep up.

Internally, the Intermix staff is hopeful that Regent — which has expertise in retail operations — is a better fit for the brand as the US enters a period of economic uncertainty.

Learn more:

Can Private Equity Win With Fashion E-Commerce?

Gap is offloading Intermix to Altamont Capital Partners, which aims to triple sales on the back of post-pandemic exuberance and e-commerce. Finding a satisfying exit may prove tough.

OXFORDSHIRE, United Kingdom — In a world that feels increasingly fractured, many of the discussions at BoF VOICES this year have focused on the issues that divide us. But in the fourth session of the gathering, speakers from Japan to Ukraine discussed the ways in which culture and creativity can transform entrenched narratives and drive positive change.

Culture, Creativity and Changing the Narrative

Irene Kim grew up in a Korean household in an American city, living in a very different cultural context than her peers. Now she’s part of the powerful “Hallyu” or Korean Wave that’s influencing art, music, drama and food across the world. “To see my way of life and how I grew up become a global phenomenon is kind of crazy,” the influencer and founder of the brand IRENEISGOOD said in a conversation with Chanel’s head of culture and arts Yana Peel and Victoria & Albert Museum curator Rosalie Kim.

But the rapid rise of Korea’s soft power in recent decades, contrasts with the experience of countries like Ghana. In 1957, the two nations had about the same GDP, but whereas South Korea became the tenth largest economy in the world, Ghana now ranks seventy-fifth. While there are many factors that play into the divergence, the power of global media narratives, positive and negative, to define a nation is part of the equation, argued photographer Campbell Addy and writer and creative producer Ekow Barnes. “We always talk about inclusion but Africa is left out,” said Barnes. “Whenever the West tells our story, it’s always a bit one-sided.”

Fast Retailing senior executive officer Koji Yanai, son of Uniqlo founder Tadashi Yanai, has spent the last few years focused on a humble project: reimagining public toilets in Tokyo. The idea was born in the run up to the Paralympic Games, initially scheduled to take place in the Japanese city in 2020, and the desire to create an intervention that would benefit not just a single group, but everyone. The result is a series of radically redesigned toilets that look more like art installations than public facilities, conceived by a host of leading creatives.

“I realised that sometimes we’re too busy to eat anything or too busy to sleep all night. But there is no single day when I didn’t go to the toilet,” Yanai said. “I believe that even a public toilet can change the world.”

No Culture Without Politics

Asma Khan and Judy Joo have plenty of experience navigating the links between soft power and hard topics. The two restaurateurs are not just chefs but political change makers, building female-owned businesses in a male dominated business and using the power of food to educate their audiences about their respective Korean and Indian heritages and their related politics. “You cannot take my food and separate culture from it,” said Khan. “You want to eat my biryani… I’m going to speak to you about racism and injustice.”

The power of culture to bring hope and humanity is especially important in times of hardship and war, former fashion director of Vogue Ukraine and founder of Better Upcycling System Julie Pelipas and 1 Granary founder and editor in chief Olya Kuryshchuk said in a conversation about their experiences since Russia invaded Ukraine in February.

“We live a double life at the moment,” Kuryshchuk said. “We’re here in this beautiful place today… but at the same time, literally right now, most of my brothers, our families, our childhood friends, they don’t have electricity, water, heating, internet, phone connection.”

The Ukraine War has changed the lives of both women, but they also shared stories of great resilience, from a group of ravers who throw parties and rebuild in the rubble of bombed out houses to the important role individuals outside the country continue to play in raising awareness and keeping focus on the situation heading into a dark and difficult winter.

“We are the creative people; we need to find how to communicate so the message reaches people,” Kuryshchuk said. “We really need to survive this winter.”

BoF VOICES 2022 is made possible in part through our partners McKinsey & Company, Shopify, Flannels, Brandlive, Lenzing, ShopRunner, Snap, Canada Goose, Invisible Collection, Soho House, and Getty Images.

8th December at 15:00 GMT / 10:00 EST

Featuring Achim Berg, senior partner of McKinsey & Company in conversation with BoF’s founder and editor-in-chief Imran Amed.

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