When Hands Off Is Right On

NEW YORK — What can a fashion brand do when it’s hit by bad p.r. or a scandal? The prescription, in most cases, is simple: Do nothing.

It takes a megascandal to shock the foundations of a fashion brand in an era of horrific news events and an entertainment culture increasingly riddled with graphic images of violence and sex. Milder forms of bad publicity simply don’t pack a punch.

That’s the consensus of more than a dozen marketers and business analysts, who noted fashion brands are often insulated by their own edgy personalities from infractions that are dim in light of events like the violence at Waco, Columbine and on 9/11.

Indeed, as Irma Zandl, president of market researcher Zandl Group, observed, "Brands with irreverent, naughty, or edgy personalities frequently experience a spike in sales when a high-profile user of them is caught in a compromising situation. It would not surprise me if Gucci, Marc Jacobs, and Saks Fifth Avenue see an increase in sales because of the publicity from the Winona Ryder trial."

In another instance of due process, NBA star and Reebok endorser Allen Iverson was acquitted of charges made this summer that he drew a gun on his wife and uncle — and sell-through rates of Reebok’s Iverson shoes stayed at 10-15 percent, on average, before the allegations were leveled, and when they were dropped, according to Reebok and independent sources. "Basketball shoes have a young urban male target, and a scandal would have to be very serious to have a negative impact," projected Matt Powell, principal of Princeton Retail Analysis.

In addition to Iverson, the do-nothing tactic has worked for names from Steve Madden accessories and footwear, whose namesake designer is serving a 41-month prison sentence for securities fraud and money laundering, to NBA star Chris Webber, recently named in a University of Michigan basketball scandal that harks back to the early Nineties.

The Madden label was protected by the designer’s distance from the brand’s image and the likelihood that most of its young customers don’t follow business news. For many living in the 21st century’s tumult, the notion of alumni providing money and perks to their alma mater’s athletes, like Sacramento King Webber, is barely an eyebrow-raiser, and sales of DaDa’s CWebb basketball shoes are holding steady, Powell reported. As for Iverson, the Philadelphia 76er trades on a bad-boy image, and the charges against him simply served to draw more attention to the Reebok footwear he endorses, sources said.

"Often, what’s damaging is becoming too timid, overly defensive — especially when it’s a fashion brand that’s had a very defined strategy," advised Diane Hamilton, a partner in Boston-based Retail Value Consultants, in referring to the aftermath of bad publicity.

Occasionally, controversy translates into a long-term positive impact, as ultimately was the case with Calvin Klein’s provocative advertising in the late Nineties. At that time, some harshly criticized it for imagery they saw as too overtly sexual, considering the ads’ teenage models, and Klein pulled part of the campaign. Today, observers believe Klein broke a marketing barrier in this country, where ads are still far more conservative than in Europe and South America. "If anything, the Calvin Klein flap made the brand more glamorous," stated Sam Shahid, president and creative director of fashion ad agency Shahid & Co. "The Calvin Klein ads were about sex. Sex makes you feel good; pleasure is always fine." Observed Neil Kraft, president of ad agency Kraftworks, "Calvin’s image has always been around great design and a certain amount of edginess. Those ads didn’t change that."

When negative business effects do arise, a brand needs to reestablish its credibility by assessing what aspects of its image or goods need repair, and then responding, in part, with advertising and p.r. efforts. The scale and scope of such campaigns can vary widely, depending on the extent of damage. When a brand is badly tarnished, sources said, it’s best to begin by making a direct connection with consumers, through a public relations effort such as interviews or community events, and to follow it with ads to further restore the luster.

For example, Don Ziccardi, chief executive officer at Ziccardi Partners, Frierson, Mee Inc., recalled how it took one year and $1 million-worth of ads and p.r. programs, developed by his agency, to revive people’s trust in Prudential back in 1995, after some of the firm’s salespeople misrepresented its insurance and investment products. When Abercrombie & Fitch offered T-shirts pairing caricatures of Chinese with the words Wong Brothers Laundry Service, in its summer 2002 quarterly, various Chinese groups contacted Shahid & Co., which produced the magalog, and asked for an apology in the form of donations to their organizations. Shahid & Co., in turn, passed those requests to A&F. Abercrombie officials declined to return phone calls seeking comment on their response.

"Companies need cultural anthropologists working for them," counseled Marc Gobe, president, chief executive officer and executive creative director at desgrippes gobe group, a brand-image creation firm. "The Abercrombie & Fitch culture is about as connected and sensitive as companies get," noted Gobe, who has consulted for A&F. "I think they were taken completely by surprise by the Chinese T-shirt incident; they thought they were speaking the language of youth culture. Cultural anthropologists can help companies understand changes, which sometimes arrive fast. The Calvin Klein ads that once were so controversial look tame compared with some of today’s fashion advertising, and YSL’s fragrance [M7] ad has full-frontal male nudity."

Events provoking the most damaging publicity in the past few years have been those with broader societal implications, underpinned by a degree of fear and uncertainty, rather than the missteps of a fashion brand or icon, notably: the perceived failure of U.S. intelligence services in the period prior to 9/11; the Catholic Church’s scandal over inappropriate sexual activity, and the raft of corporate accounting scandals that have decimated investors’ lifetime savings while lining the pockets of those companies’ executives, according to observers.

If not for this climate, contended Ziccardi, "Martha Stewart might not have been nailed to the cross. Stewart’s accused of doing something quite different from what Lizzie Grubman was convicted of doing. Running down 16 people is truly heinous," he said of Grubman’s offenses. "White collar crime, like Stewart’s, is [rampant] and everyone knows it."

Stoking the atmosphere of fear and uncertainty is the expansion of a 24/7 media world and the subsequent availability of information to the point of pervasiveness. This, in turn, has created what Brand Keys president Robert Passikoff calls a bionic consumer, one who is no longer persuaded by marketing campaigns and whose expectations of brands continues to climb. That helps explain why, in the end, the most salient element in assessing a brand’s power is its relevance to the people, its emotional ties with them, observers concluded. "There are plenty of brands, like J. Crew and Benetton, that have lost the plot, that have forgotten why they were relevant to the consumer," ad executive Kraft said. "When you have this problem on the scale that a Gap or a Levi now does, that’s a serious image problem. How they can deal with this remains to be seen."

Beyond that, asserted Walter Levy, a managing director at management consultant Kurt Salmon Associates, "We live in a society that’s so competitive, ethics are out the window. Today, money trumps everything."