How Will Balenciaga Survive Its Moral Panic Pile-On?

There are flash-in-the-pan scandals, and then there are moral panic pile-ons like the firestorm edgy Spanish fashion house Balenciaga is currently experiencing; the ones that have the potential to change a brand forever.

Balenciaga is currently weathering intense backlash aimed at a series of recently-released ad campaigns: one features Balenciaga-clad children posed next to teddy bears dressed in what some have interpreted to be BDSM gear, another shows celebrities with paperwork in the background detailing a 2008 Supreme Court ruling on child pornography laws while a third image from the Spring 2023 campaign, which just started drawing ire this week, features a book of work by artist Michael Borremans, who has in the past produced images of blood-soaked children.

“For a heritage luxury brand, ‘look at me’ edginess is a lame substitute for authentic creativity,” Orit, the founder and CEO of luxury marketing agency O Group, told The Daily Beast on Tuesday.

How Bella Hadid Owned Paris Fashion Week—and Blew Up TikTokMEGASTAR

Helen Holmes, Tim Teeman

Everyone from Balenciaga brand partner Kim Kardashian to ex-UK Brexit Party leader Nigel Farage—who, headline-hog that he is, has an opinion on so many things—has decried the images. “The safety of children must be held with the highest regard and any attempts to normalize child abuse of any kind should have no place in our society,” Kardashian said in a statement on Sunday, also explaining that she was re-evaluating her longstanding and high-profile relationship with the brand.

Kylie Jenner also clapped back at TikTok critics this week who accused her of posting photos of her new son to distract from the scandal. “Uh whyyyyyy would I post my child to cover up for Balenciaga?” Jenner wrote. “This is why I don’t do this, always something to say.”

Others, though, have taken the controversy and run with it even further, evoking QAnon-propagated conspiracy theories by accusing the brand of satanic practices, and singling out individual stylists and agents who’ve worked with Balenciaga in the past.

On Monday, Balenciaga released a statement saying that the brand strongly condemns child abuse and that it was never their intent to include it in their advertising narrative.

“The two separate ad campaigns in question reflect a series of grievous errors for which Balenciaga takes responsibility,” the brand’s statement continued. “The first campaign, the gift collection campaign, featured children with plush bear bags dressed in what some have labelled BDSM-inspired outfits. Our plush bear bags and the gift collection should not have been featured with children. This was a wrong choice by Balenciaga, combined with our failure in assessing and validating images. The responsibility for this lies with Balenciaga alone.”

“The second, separate campaign for spring 2023, which was meant to replicate a business office environment, included a photo with a page in the background from a Supreme Court ruling ‘United States V. Williams’ 2008 which confirms as illegal and not protected by freedom of speech the promotion of child pornography,” the statement reads.

“All the items included in this shooting were provided by third parties that confirmed in writing that these props were fake office documents. They turned out to be [real] papers most likely coming from the filming of a television drama. The inclusion of these unapproved documents was the result of reckless negligence for which Balenciaga has filed a complaint.”

“We take full accountability for our lack of oversight and control of the documents in the background, and we could have done things differently.”

Nevertheless, later that day, Business of Fashion announced that it was no longer giving Balenciaga creative director Demna Gvasalia its 2022 Global Voices award, as the publication announced it would earlier this year. The Daily Beast reached out to BoF for comment.

“At BoF, we hold the safety of children in the highest regard,” the publication said in a statement regarding its decision. “And like many, we have been seeking the truth about how children appeared with BDSM-inspired products in Balenciaga’s recent campaign images, which are wholly inconsistent with our values. As a result, we will not be presenting Demna with the Global Voices Award this year. Nonetheless, we asked the leadership at Balenciaga to come to Voices to take responsibility for releasing these images and offer an explanation.”

On top of its recent falling-out with increasingly far-right figure Kanye West, what will this latest advertising scandal mean for Balenciaga’s Q4 numbers? Already, a prominent luxury consignment store in Dubai has announced that it will drop all Balenciaga products from its store and website until further notice, and the #cancelbalenciaga hashtag on TikTok is littered with creators slicing up their $1,500 Balenciaga bags, burning $900 Balenciaga sock trainers and removing Balenciaga posters from their walls.

But this performative garment-culling may not add up to much, Susan Scafidi, the academic director of Fordham University’s Fashion Law Institute, told The Daily Beast.

“In an era when we all have high-res screens and are accustomed to hunting for visual ‘Easter eggs,’ no accident or twisted inside joke goes unnoticed,” Scafidi said, but “Balenciaga has handled the scandal as well as a brand could, offering a timely apology and also taking concrete action in the form of pulling the offending merch, erasing the offending campaign images, and most creatively pointing a powerful legal finger at the third parties who at least share responsibility.”

Last week, Balenciaga filed a $25 million lawsuit against the production company North Six, Inc. and set designer Nicholas Des Jardins over their contributions to the creation of the Spring 2023 campaign that featured the Supreme Court printout; the companies were not involved in the teddy bear campaign. Des Jardins also recently created the horse on the cover of Beyoncé’s album Renaissance.

A source close to North Six told The Daily Beast that while the production company logistically managed the Spring ‘23 shoot that produced the image with offending Supreme Court paperwork, an effort that included getting permit approval for shoots, booking locations, sourcing equipment and crew management, North Six never had involvement in the shoot’s creative direction of the shoot and was not physically on site for the final set arrangement as Balenciaga wanted it to be a closed set.

“As for Balenciaga’s future, the brand will undoubtedly endure, even as its namesake founder spins in his grave,” Scafidi continued. “The industry has a history of unfortunately over-provocative ad campaigns, and both fashion and social media have fast cycles and short memories.”

“The reality is, I don’t think many consumers would really believe that Balenciaga or anyone at the company supports child pornography, so it’s interesting how we get so worked up as a society,” Dr. Alix Barasch, Associate Professor of Marketing at University of Colorado at Boulder, told The Daily Beast.

“When Nike released their huge Colin Kaepernick campaign and it made certain people upset, I remember seeing people burning their Nikes and people saying we’d see a dip in Nike’s stock prices," Barasch said. “Maybe there was a blip, but the reality for months after that was that Nike’s stock only increased. People who buy Balenciaga bags are buying them not because the brand opposes child porn, but because they take artistic risks, and these people are not going to hold a creative misstep against the brand forever.”

Gucci caught a massive amount of flack for showing a straitjacket-like ensemble on the runway in 2019; that same year, Burberry Chief Creative Officer Riccardo Tisci sent a “noose hoodie” down the runway and paid the PR price. Both brands ultimately weathered the unsavory episodes in the court of public opinion.

However, in terms of economics, there’s a lot at stake. The past couple of years have seen luxury brands do a roaring trade: the US market grew 44 per cent for Hermès in the first quarter of 2022, and LVMH and Kering, Balenciaga’s parent company, both reported encouraging US market growth at the same time, Vogue Business reported in May.

Further emphasizing Balenciaga’s focus on escalating financial success (“sales at Balenciaga and Alexander McQueen were particularly buoyant across all product categories,” Kering said in a 3rd quarter statement in October), the brand staged their Spring 2023 presentation at the New York Stock Exchange this year.

After Gucci put out a sweater in 2018 that many said resembled a person in blackface, Kering CFO Jean-Marc Duplaix denied that the resulting outcry had an effect on sales. However, BoF reported that Gucci’s sales were only up 20 percent that year from a year earlier as opposed to the year prior, when Gucci experienced a 49 percent uptick in sales; Balenciaga is certainly at risk of experiencing a similar dip.

In an interview with the New York Post, luxury marketing expert Pam Danziger said Balenciaga’s bottom line will likely feel the heat of the child abuse imagery scandal. “I don’t see how they defend themselves, quite honestly,” Danziger said. “I think this will have a very strong impact on the brand ultimately.”

“The more immediate question is the fate of its current creative director, Demna, who not only connected Ye to the brand with ultimately unfortunate results but also oversaw the creation of the BDSM teddy bears and accompanying ads,” Scafidi told The Daily Beast. “Kering recently cut loose another star designer, Alessandro Michele, simply to refresh the Gucci brand. If Balenciaga’s parent company needs a sacrificial lamb to atone for its offending bear, Demna could be the one to go. A picture is indeed worth a thousand words—or perhaps $25 million in damages.”

Balenciaga did not immediately respond to The Daily Beast’s requests for comment.