Balenciaga: A Crisis Communications Case Study
Crises can be any event disrupting operations of a company or organization and affecting the reputation or trust between the company and its stakeholders. This case study reviews and analyzes Balenciaga and its ability to effectively address, respond and take action against a crisis of its own making. I will discuss the event which initiated the crisis situation and the internal policies and practices that allowed for such an event to occur, as well as how external forces played a role in the exacerbation on social media. I will also analyze the post crisis corrective actions taken by Balenciaga and how these actions adhered to the Page Principles discussed in this course.
Organization Overview
Born in 1895, Cristóbal Balenciaga was a young boy when his mother taught him how to design and sew. The Spanish prodigy went on to Paris at the age of 15 to further his fashion forward mindset and creative direction (Cristóbal Balenciaga 2024). By 1917, Balenciaga established his fashion house where he would become known for his innovative and thought provoking designs which tested the limits of fashion at the time. With his focus on unique shapes and unconventional designs, Balenciaga had a significant impact on the historic and modern fashion industry. His influential concepts such as the “sack dress” inspired the work of future artists like Oscar de la Renta (Introducing Cristóbal Balenciaga · V&A). The iconic designer died in 1972, just four years after the original Balenciaga fashion house closed and he retired (Introducing Cristóbal Balenciaga · V&A). However, in 1986 the brand was revived and absorbed by Kering, a French-based luxury group which owns other notable designer brands such as Gucci and Yves Saint Laurent. Since then, a wide range of talented and aspiring designers have had the privilege of creating pieces under the Balenciaga name. The brand’s current designer, Demna Gvasalia, was appointed as artistic director in 2015 and paid tribute to Cristóbal by relaunching the iconic Couture collection after half a century (Brand history: Balenciaga). Demna has upheld the legacy of the transcendent designer through his trend-setting approach to modern styles and his emphasis on transforming streetwear into high fashion. The high quality pieces and innovative campaigns have held Balenciaga at the forefront of luxury fashion. The brand’s marketing strategy has transformed the way in which luxury companies advertise on social media and ignited a shift in creativity towards ethereal and otherworldly concepts. Balenciaga’s use of “disruptive” content and campaign design was created to make consumers stop and stare, while increasing overall brand awareness and notability (Valades, 2024). The use of non-traditional materials and fabrics paired with hyperbolized designs like large sneakers and statement jewelry has drawn many eyes towards Balenciaga, invoking both strong positive and negative opinions. These controversial takes have garnered attention of celebrities and influencers like Kim Kardashian, itching to make a statement through a bold outfit. Balenciaga has targeted the younger, consumption-crazed generations by focusing campaigns and partnerships on platforms like TikTok ensuring its spot on the frontlines of upcoming trends (Lessons from Balenciaga's advertisement controversy). While this approach to marketing and design is effective in creating conversation among consumers, the line between controversial and unethical is fine and if crossed, can lead to severe reputational consequences.
Crisis Summary
In November of 2022, Balenciaga was set to release its brand new holiday campaign, featuring bold new accessories and streetwear. However, upon its release, the exciting campaign launch led to one of the largest and most impactful crisis situations in brand history. The campaign consisted of a series of photos posted on Balenciaga’s social media platforms showcasing the new pieces and attempting to catch consumer attention. These photos featured various young children, likely ages four to five, wearing branded Balenciaga outfits and holding teddy bear purses dressed in bondage, harnesses and explicit costumes. These vulgar accessories were also featured on the runway at Paris Fashion Week (Issawi & Cohen, 2024). The campaign photos sparked immediate outrage on social media, with users claiming the brand was enabling pedophilia and exploiting young children. Quickly, the crisis expanded and became trending on numerous social platforms, with hashtags like #BurnBalenciaga and #CancelBalenciaga fostering millions of shares and reposts (Gárgoles & Ambás, 1970). Such severe allegations and connotations surrounding the brand’s reputation immediately resulted in a lack of trust from consumers and distaste towards the brand’s intentions. In many situations similar to this, the company will cease production on any impending campaigns or launches and focus on repairing the damage and ensuring actions to correct the faults. However, Balenciaga did not take this approach to crisis management, but instead continued with an upcoming collaboration with Adidas. This product launch was teased with advertisements featuring the new design, including a photo which was posted of the new handbag resting on top of stacks of seemingly meaningless papers and documents. Under normal circumstances, the brand most likely would not have been under such intense scrutiny, but because of the recent ethical indiscretion, concerned consumers and social media conspiracy theorists were actively seeking evidence to support their assumptions. Because of this, it was noticed, under closer inspection, that many of the documents were pages from a United States Supreme Court case, United States v. Williams. This court case discusses the ruling by federal courts that it is constitutional to charge perpetrators with creating, promoting and possessing child pornography (United States v. Williams). Consumers, curious and concerned as to why such disturbing topics needed to be featured in these campaigns, began to question the judgment and intentions of Balenciaga and its creative team. Upon media reporting and continued discussions on social forums like Twitter and TikTok, the online criticism quickly turned to rage and violence, with two Balenciaga retail stores being vandalized throughout the duration of the crisis (Gárgoles & Ambás, 1970). Many extremists used the crisis to perpetuate conservative ideals and label the brand and its employees as “satan-worshipers” with devious alternative motives (Paton et al., 2022). The idea that a luxury designer formulated multiple campaigns to promote child pornography and glamourize these taboo ideas shocked and enraged consumers and stakeholders while reinforcing the neglectful and insensitive persona of Balenciaga. Quick and effective measures needed to be taken by the brand in order to avoid complete reputational demise and regain trust among stakeholders.
Stakeholders
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The primary stakeholders, consumers, employees and parents, were all negatively impacted by the campaigns. Employees were negatively affected by the campaign, as negative publicity about the company you work for is likely to diminish morale. As for those directly responsible for the design and production of the campaign, the internal investigation questioned their ethicality, but identified a need for ethical guidelines and employee training. This training of ethical standards was initiated following the investigation and policy changes (BestContentReview, 2024). Consumers reacted especially negatively to the controversy, taking to social media to express distaste by posting videos damaging their Balenciaga items and removing the labels. Such a tasteless error in judgment by the brand risked possibly never regaining the trust and respect of consumers. In efforts to repair the relationship with consumers, Balenciaga released statements on social media expressing sympathy for those hurt by the campaign and asking for forgiveness. However, the brand turned off the comments on this post and others following the crisis, limiting engagement with consumers. Lastly, and likely most targeted by the campaign, were the parents and families of the children involved, and around the world. The inappropriate and distasteful portrayal and context of children in the campaigns rallied this demographic against Balenciaga and called for the brand to take responsibility.
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Secondary stakeholders affected by the campaign included investors in the brand, along with influencers and ambassadors. Investors have a financial interest in the state of the company, so a drop in sales or stock value might impact them significantly. Balenciaga’s statements addressing the issue aimed to ease the minds of investors and provide transparency. By emphasizing a commitment to reform and ethical education, Balenciaga attempted to regain investor trust. On the other hand, influencers and ambassadors remained under the pressure of the public to make a statement regarding their ties to the brand. Kim Kardashian revealed to social media she was reevaluating her relationship with Balenciaga, while Julia Fox actively expressed her disgust for Balenciaga, distancing herself from the brand (Issawi & Cohen, 2024). Efforts to provide information and reassurance to stakeholders helped lay the foundation for rebuilding trust among ambassadors and investors. Kardashian has since been photographed wearing Balenciaga and tagging the brand on social media.
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Other stakeholders in Balenciaga might include suppliers and communities. While there was a lack of accurate data on this subject, suppliers likely addressed concerns about how the campaigns may affect their business in the future, with a predicted drop in sales and stock value. In turn, Balenciaga worked to reassure these parties that measures are being taken to rectify the issues which led to the crisis. The communities affected most by this campaign are those focused on child safety and advocacy, and these groups were outspoken about the damage done by the release of these campaigns. Balenciaga attempted to make amends with these communities by signing a three-year deal with the National Children’s Alliance (NCA) to showcase advocacy for those harmed by the campaigns (BestContentReview, 2024).
Additional third-party factors played a role in exacerbating the magnitude of the campaign, and in turn, were impacted by the controversial crisis. The media covered the crisis and investigated theories as to the intentions of Balenciaga with the messaging in these campaigns, feeding into the ongoing discussion of the scandals. The statements released by Balenciaga helped settle any circulating rumors being perpetuated by the media. While no government officials or authoritative figures actively placed pressure on Balenciaga to adjust its policies and engage in ethical reform, the brand worked internally to ensure the ethical standards and policies are being met post crisis. The threat of legal implications by the campaigns likely urged Balenciaga to avoid controversies in the future.
Situational Analysis
The nature of this situation and the topics coming to light make it a reputational crisis, with severe consequences if not addressed and handled effectively. The portrayal of young children with sexual innuendos and controversial topics led to widespread scrutiny of the brand, which can have drastic effects on the entire business. The expansive conversation surrounding the campaigns including social media backlash and extensive investigative media coverage could lead the brand to immense reputational deficits. In terms of finances, the lack of consumer incentive to purchase Balenciaga products and overall decline in sales had the potential to negatively affect business practices and stock prices. Additionally, as I will discuss more in depth later, Balenciaga filed suit against the production company responsible for the campaign, North Six. Had the lawsuit gone to court, extensive legal fees would have impacted the brand significantly.
This crisis was triggered by the release of the initial photos for the 2022 holiday campaign, and spiraled to reveal underlying ethical issues within Balenciaga’s internal practices. Much of the online criticism sparked from the unbelievable notion that not a single Balenciaga employee or member of the production team noticed the explicit inclusions or cared about the potential consequences of featuring such controversial topics. These insinuations about Balenciaga’s operations led to the opening of an internal investigation into organizational issues which enabled this crisis to occur (Gárgoles & Ambás, 1970). There were many factors which led to this crisis situation, including an extreme lack of oversight on creative production and neglect towards topics and ideologies society deems as inappropriate and insensitive. Campaigns of this magnitude, in most cases, must pass through multiple levels of approval before beginning production. So, the lack of ethical awareness presented by the campaign and lack of oversight on creative projects leaves Balenciaga at fault. The controversial elements indicated a need for ethical training and guidelines for monitoring creative direction. Balenciaga’s lack of awareness in terms of the campaign were also apparent through the obvious and uncomfortable use of children in such a sexual advertisement. In recent decades, society has shifted towards an emphasis on child safety and exposing those who exploit or hurt children. The lack of thought towards the campaign showcases a severe disconnect between the creative minds at Balenciaga and the norms of society. Balenciaga has prided itself on its innovative and out-of-the-box thinking that led to its explosion in the luxury fashion marketplace. However, this unrelenting desire to be the most outrageous or thought provoking has led the brand away from its core values. Balenciaga’s values consist of creativity and innovation, quality craftsmanship, authenticity and identity, sustainability and customer centricity. By not focusing on the wellbeing of consumers and stakeholders who may be emotionally or mentally affected by the contents of the campaign, the brand became misaligned with its values and lost the vision of customer centricity that was so proudly enacted by Cristóbal Balenciaga.
Based on the information made available to the public, Balenciaga did not appear ready or prepared to deal with such a crisis. Initially, Balenciaga released a statement addressing the allegations and distancing itself from the blame. The statement read, “We take this matter very seriously and are taking legal action against the parties responsible for creating the set and including unapproved items for our Spring 23 campaign photoshoot.” This statement revealed Balenciaga was not prepared to take responsibility for the mistakes made in the campaign, and a lawsuit was filed against North Six, a production company focused on luxury fashion media. The production company refused to comment to the media in light of the filing. The lawsuit targeted the production company and set designer, but it was announced on December 2 that the brand was no longer pursuing legal action (Paton et al., 2022). Balenciaga released a second statement admitting fault for including children in such a sexually explicit advertisement, saying, “Our plush bear bags… should not have been featured with children. This was a wrong choice by Balenciaga, combined with our failure in assessing and validating images” (Cost, 2022). The statement also addressed the photos from the Adidas collaboration, “ All the items included in this shooting were provided by third parties that confirmed in writing that these props were fake office documents.” Despite the statement providing information and taking responsibility, the brand’s original crisis response denied the mistake and used the production company and set designers as a scapegoat (Lessons from Balenciaga's advertisement controversy). The deflection of responsibility and lack of information gathering before providing a response and filing a frivolous lawsuit reflects poorly on the reputation of Balenciaga and the crisis management team. When the lawsuit was dropped and the brand realized the full reputational damage incurred by the crisis, the second statement was released in efforts to curry public favor and regain trust. An effective crisis management plan includes gathering all available information before formulating a response, as well as acting in the best interest of the organization and its stakeholders. Balenciaga initially failed to reveal all the information involved and pushed blame onto a different entity, but redesigned its strategy to be more transparent and authentic to the nature of the crisis in its second statement. The spokesperson for the crisis was artistic director and designer Demna Gvasalia who took to Instagram to publicly apologize for the contents of the campaign, saying it was the “wrong artistic choice” (Issawi & Cohen, 2024). Demna argued he did not realize how detrimental and inappropriate the photos would be to the brand and its stakeholders, but disregarded any knowledge of the documents shown in the second campaign. As an authority figure, Demna was a solid choice for a spokesperson, but his late response and initial disregard for conducting ethical practices furthered the neglectful narrative (Issawi & Cohen, 2024).
Strategies & Tactics
In light of the crisis, Balenciaga was forced to create effective strategies and tactics to engage with the public, address their concerns and take corrective actions for the future. Despite this effort to make amends with those impacted by the crisis, Balenciaga was not readily prepared to deal with such an event, and the response time and initial approach expressed that. Crises involving social media require an extremely timely response because of the viral tendencies of such controversial topics, but Balenciaga failed to release a statement addressing the crisis until eight days after the release of the campaign (Caruso, 2022). This slow response time indicated that the brand did not have an effective crisis management plan in place to deal with such a severe issue, but the immediate removal of the campaign photos from social media platforms proved the brand had appropriate intentions.
A prominent strategy applied to the crisis by Balenciaga was to issue a statement taking responsibility for the campaign and apologizing to stakeholders for the neglectful and insensitive photos. Taking accountability for mistakes made by the organization is the first step to regaining public trust and altering the perception of the brand. Balenciaga posted these statements to their social media accounts, in an effort to reach a wide audience and address an array of stakeholder concerns. While consumers respected the ability of the brand to take blame for its negligence, the severity of the controversy inhibited many from believing Balenciaga was capable of change. Additionally, the brand attempted to tame the online scrutiny by removing the content from the internet. Since the original photos were posted to social media, Balenciaga removed the photos in a timely manner to aid in containing the crisis. The content removal was necessary to show stakeholders that a plan is in progress to amend the situation as well as express regret for what was released to the public. These strategies and tactics were both extremely effective in minimizing the damage that could be done after the original launch of the campaigns. Balenciaga also strategized to internally restructure its creative approval process and implement changes in policy to prevent similar oversight from occurring again. To do this, a thorough internal investigation was conducted as a way to pinpoint where and how said policies needed to be revised. Designer Demna Gvasalia and CEO Cedric Charbit both released statements addressing the active change Balenciaga is enduring as a means of repairing the company’s reputation (Paton et al., 2022). Training courses were also provided to employees and creatives to ensure a standard of ethical business practice and marketing strategies. This strategy, along with the tactic proved effective in displaying the deep regret of Balenciaga for allowing such controversial ideas to be released to the public. The brand sought to rectify the situation by interacting and engaging with organizations dedicated to child safety and the abolition of child trafficking. Balenciaga initiated a three-year contract with NCA in an effort to prove its rejection of the ideas expressed in the campaign. This method curried favor with numerous activist organization and aided the public in seeing Balenciaga as a humanized organization once again.
On the other hand, Balenciaga did a poor job engaging with consumers on social media. Despite providing the public with a written statement, the brand turned off the comments on these posts, inhibiting users from expressing concerns or backlash. This strategy is ineffective in crisis situations because of the lack of communication and ability of consumer voices to be heard. Waiting too long after the trigger event to respond and ceasing organic communication with stakeholders can be perceived by onlookers as deceptive and disingenuous.
Earned Media & Social Media
Prior to the crisis, Balenciaga’s social media platforms primarily utilized Instagram, TikTok and Twitter to promote its ambassadors and celebrity spokespeople and tease product launches and upcoming collaborations. The brand utilized its disruptive marketing strategy to generate views and grow its following.
However, during the crisis situation, Balenciaga failed to have a detailed and efficient crisis management plan in place, which led to the cease of brand-promoting content being posted. The initial response released by Balenciaga during this time stated, “We sincerely apologize for any offense our holiday campaign may have caused.” The brand then went on to notify the public that legal action will be taken against those responsible for set design and production (Paton et al., 2022). After dropping the legal charges, Balenciaga released a public apology which addressed the issue at hand, explained the role it played in the crisis, took responsibility for that role and reiterated how strongly the brand stands against all forms of child abuse. This second statement read, “We want to learn from our mistakes and identify ways we can contribute. Balenciaga reiterates its sincere apologies for the offense we have caused and extends its apologies to talents and partners.” While addressing stakeholders directly, the line of communication between the two was one-sided, with consumers unable to comment specifically on Balenciaga’s posts and updates.
Following the crisis and efforts to amend the situation, Balenciaga inched towards returning to the typical content and posting schedule as before, while including sporadic posts showcasing the brand’s efforts to educate internally. As a result of the incessant criticism across social platforms, Balenciaga has limited its comments on Instagram, disabling certain keywords and content.
Throughout the duration of the crisis, the media interjected with news stories, in-depth investigations and crazy conspiracy theories to remain part of the conversation that was primarily taking place on social media. However, the virality of the situation made Balenciaga’s ethical transgressions the topic of discussion for weeks following the initial event. Many prominent news organizations evaluated and did case studies on the reputational demise of Balenciaga, including The New York Times and CNN. The brand and its leadership, such as CEO Cedric Charbit did a more effective job communicating with the media, doing interviews and listing the actions he will take to return Balenciaga to its iconic stature (Paton et al., 2022).
Post-crisis corrective actions
As stated in Balenciaga’s statements regarding the crisis, the brand and its leadership were committed to ensuring events like this were unable to occur in the future, using training programs, education, systemic alterations and review processes. The brand used various modes of communication to reiterate to stakeholders that these matters are being taken seriously and Balenciaga’s corporate social responsibility to the public is greater than any controversial mistake or ethical dispute. Regaining the trust of these stakeholders was essential to reforming the brand’s reputation, as well as taking steps to improve the company’s ethicality. Despite the initial attempt to place blame on the production company, Balenciaga remained transparent about the crisis and what was happening behind the scenes. Additionally, the initiatives taken to provide resources and assistance to children and families affected by abuse, trafficking, etc furthered the brand’s mission to repair the reputational damage caused by the campaigns.