Briefing: December 2, 2022

The past week (and at least a couple before it) have been dominated by backlash over Balenciaga ad campaigns, including one featuring children holding plush bear bags that appear to be wearing S&M-style harnesses, and another, its Spring 2023 ad, which includes a page from a Supreme Court decision upholding a law banning child porn. Some of that consumer furor came to a head this week with Balenciaga filing a contract suit in a New York state court against the production company and set design behind the SS23 campaign for engaging in “inexplicable acts and omissions” that were “malevolent or, at the very least, extraordinarily reckless.”

As I dive into in the article below, the potentially most interesting element here is not the summons + notice, itself, which gives us relatively little info about Balenciaga’s claims; its the backlash that the brand has received as a result of the suit, a case that it must have thought would help – and not hurt – the situation. Instead, in the wake of lodging the summons, Balenciaga angered consumers even further, with many arguing that the brand’s suit is yet another attempt to shift the blame.

This appears to be the Streisand Effect in action – something that is going largely unaddressed in connection with the case (and the impact of which Balenciaga may have underestimated in this situation). Nonetheless, this is an opportunity to be reminded of the potential for unwanted amplification, with attorney Darren Cahr stating on Twitter this week, “Rarely does a month go by where the Streisand Effect doesn’t come up in discussions with clients. Of the many ‘laws’ of the modern internet, I can’t think of any other that has become such an integral element of regular legal counsel.”

It is also a reminder that such PR crises have reach. After all, Balenciaga is not the only brand that is being subjected to widespread consumer ire as a result of the campaigns. The social media accounts of adidas, whose collaborative Balenciaga wares appear in the SS23 campaign, are being inundated with criticism, as well.

On the litigation front … Louis Vuitton and Sandra Ling have filed a joint motion for entry of judgment in furtherance of a settlement in their upcycling case. As we exclusively reported last month, Sandra Ling Designs, Inc. and owner Sandra Ling offered to allow a judgment to be entered against them, including a $603k sum & a permanent injunction, and also moved to drop the counterclaims they lodged against LV.

– The final order and judgment in Chanel v. Shiver + Duke is right here.

– A Jan. 30, 2023 jury trial date has been set for Hermès v. RothschildThe latest on that one here.

– Instagram account-turned-media entity FJerry has lodged a copyright, false endorsement & right of publicity complaint against a supplement maker for allegedly co-opting images from DudeWithSign, which FJerry has a license agreement with.

– Rihanna’s Savage X Fenty will pay $1.2 million to settle a consumer protection lawsuit brought by the Santa Clara, Santa Cruz, San Diego, and Los Angeles County District Attorney’s Offices, and the Santa Monica City Attorney’s Office for allegedly misleading consumers.

INDUSTRY IN BRIEFRolex is launching to a new pre-owned authentication effort, in connection with which it will issue certificates of authenticity to authorized dealers – like Bucherer – that sell its pre-owned watches. This looks like a direct effort to bolster its attractiveness in the increasingly competitive resale space, and fight against fakes. “Rolex previously had no role in authenticating or tracking its products once they had been sold to its dealer network,” per Bloomberg.

And speaking the secondary market, LVMH has launched an interesting new venture called Heristoria, which the LVMH-founded luxury blockchain ecosystem Aura describes as …

In recent deal-making news: British fashion chain Next Plc will reportedly acquire bankrupt retailer Joules. Mike Ashley’s Frasers and retailer Marks & Spencer had also showed interest in Joules, per Bloomberg.

– On the fashion tech funding front … Netail, a technology that enables retailers to auto-identify competitors across the internet and track their assortments, availability and optimize prices in real time, announced the closing of $5 million in seed funding.

– And Exor, which has expressed interest in bulking up its stakes in the luxury space, has 6.5 billion euros to spend, with CEO John Elkann saying this week that the co. will invest around 5 billion euros in new companies it wants to buy, “potentially a large one and three to five smaller ones,” per Reuters, with a focus mainly on healthcare, luxury and technology. As of now, Giorgio Armani is not one of them. Elkann says, “Armani is a company for which we have huge respect. There is no conversation with the company nor with Mr. Armani himself.”