15 November 2018

Seeking an injunction has the power to blitz a 'Brand'

Skadden Arps is top brand

Beyonce has feelings and feelings do matter. Feelings about what a brand denotes matter greatly.

Today it's been announced that Beyonce’s company, Parkwood, has bought out Philip Green's 50% share in Ivy Park, the clothing label she launched with Green’s Arcadia Group in 2016. Brand equity, brand value and brand associations are currently red-hot topics for the Arcadia retail empire. But brand meltdown continues to be the underlying theme. Arcadia has had an annual advertising spend of tens of millions in the UK fashion press. The meltdown is definitely having significant knock-on effects. 

Harassment

The personal conduct of senior executives doesn’t invariably have a bearing on brand value or customer perception. But for ‘celebrity’ executives the adverse impact tends to be forceful. Coming on top of the controversy over BHS, the possible effects on Arcadia staff morale can’t be discounted either.  Sir Philip has additional pressures too.  His credit insurers have cut cover for suppliers to Arcadia. This pullback is yet another very damaging commercial blow.

Brand blitz

Branding is a constantly blistering topic amongst businesses, marketers, entrepreneurs and executives. Everyone wants brand value. Most struggle to achieve it. Few brands truly accomplish it. Brand value is difficult to quantify. But if the brand is blitzed by scandal the financial losses can be horribly easy to tot up.

Feelings matter

Brand equity is measured by reference to the importance of a brand in the customer’s eyes. This equity segment is, in effect, about the marketplace kudos of the merchandise. Brand value is measured by the financial significance the brand carries. Brand associations relate to anything that creates a positive, or negative relationship with the brand. Feelings definitely matter. Feeling associations can be based on functional benefits. But they are also based on brand personality, organizational values, self-expressive benefits and on the emotional benefits that the brand denotes. Societal benefits qualify for inclusion too.

Doing a Mirren

Oscar winner and L'Oreal brand ambassador Dame Helen Mirren came close to damaging the cosmetics brand giant by commenting that using L’Oreal’s moisturiser “probably does f*** all”. She quickly qualified her gaffe by saying that while the L’Oreal’s ‘Age Perfect’ product probably didn’t make a difference to her skin, using it makes her "feel better".

Samsung’s ‘Maximum Overdrive’ window

Samsung has probably dealt with more blows to its brand than most organisations. Its products seemed, for a while, to be imitating the machines in ‘Maximum Overdrive’ the directorial film debut of writer Stephen King. While Samsung phones were busy catching fire, Samsung washing machines began to attack their owners. Amid this melee, Samsung’s de facto CEO found himself bang in the middle of a political scandal in South Korea. He was convicted on charges of bribery and embezzlement and sentenced to five years in prison. But the Samsung group steadily managed to successfully bounce back.

Rehabilitating a Green

No organisation can stay in crisis mode indefinitely.  The system of governance of Arcadia - via its rules, policies, procedures and its power-holders - has to move into re-stabilisation mode. This must happen. The retail group must at least try to regain the necessary legitimacy to commercially perform. The burden of proof in the accountability deliberations that must also take place will focus on the executive leadership and their professional advisers. In the context of loss, grief, anger and bewilderment each one of these individuals will strive to establish that s/he cannot be held responsible for the occurrence, or escalation, of the organisational crisis.  This blame game might well spark a new batch of fireworks - for legal folk.