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Fashion Can No Longer Hide Its Dirty Secrets

From the abuse of models to sweatshop labour, the radical transparency of digital media makes it harder for fashion to hide its dark secrets.
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  • BoF Team

Hello BoF Professionals, your exclusive weekly briefing is ready.

This week, the fashion industry was jolted by a single Instagram post.

On Monday, casting director James Scully — true to a pledge he made at BoF VOICES — became fashion's first digital-age whistle-blower, taking to social media to expose what he called the "sadistic and cruel" abuse of models at a Balenciaga casting on Sunday night. According to models who spoke to Scully, casting directors Maida Gregori Boina and Rami Fernandes — two of the biggest names in the business — left more than 150 girls waiting for over three hours on a dark staircase, with only the lights of their phones to see, while the duo left the building and went to lunch.

Balenciaga quickly terminated its relationship with Boina and Fernandes, who have subsequently denied the allegations. But Scully’s post has cast a cloud over the first few days of Paris Fashion Week and clocked up over 8,000 likes and more than 1,000 comments, many from prominent industry insiders, including Antoine Arnault — son of LVMH chairman Bernard Arnault and partner of model Natalia Vodianova — who commented: “If you hear of anything like this happening at our houses, please contact me directly.”

For Scully, the response was a victory for an important cause that’s close to his heart. But the post has implications for all corners of the industry. While digital platforms like Instagram have enabled fashion brands to forge more direct, immediate and intimate relationships with millions of consumers, greater connectivity also means greater accountability.

Indeed, in the age of Wikileaks, Edward Snowden and the Panama Papers, digital media also exposes fashion companies to a new kind of radical transparency where secrets are hard to keep secret. In a world where billions of people are armed with smartphones and social media, the once hidden, behind-the-scenes of fashion — from model castings to factory floors to executive suites — can swiftly become as visible, instantly sharable and open to scrutiny as the gloss of advertising campaigns and flagship stores that make up the front-end of the industry.

Unequal pay for women. Garment workers’ rights. Racism. Environmental damage. In the age of the digital whistle-blower, all is visible under the gaze of the Internet. And fashion companies will have little choice but to confront their dirty secrets — or face the fallout of having them exposed in front of the industry and millions of end consumers across the world.

THE NEWS IN BRIEF

BCBG Max Azria declares bankruptcy. The fashion house filed for bankruptcy protection on Wednesday as part of a restructuring process that includes the closing of 120 stores primarily in the US, as well shuttering locations in Canada and consolidating operations in Europe and Japan. The company has been granted a loan of $15 million to support it through the bankruptcy process, which will result in an auction of its assets.

Burberry shares jump after activist Belgian investor takes 3 percent. Shares in the British luxury goods maker leapt by nearly 6 percent on Tuesday after Albert Frère, an independent director of LVMH, acquired a 3 percent stake in the company through Groupe Bruxelles Lambert. The move comes at a time when the group was reported to have turned down several approaches from Coach and is in the midst of a transition that will see current CEO Christopher Bailey relinquish his role to former Céline CEO Marco Gobbetti later this year.

YNAP sees further profit rises ahead after strong sales growth. The fashion e-commerce giant said it expects to see further growth in its core profit margin after it posted a 17 percent rise in 2016, and full year net revenues of €1.9 billion (about $2 billion), helped by strong demand in all of its key regions. CEO Federico Marchetti said the company was aiming to build the luxury retail ecosystem of the future, highlighting the strength of its partnerships with luxury brands.

Hudson's Bay's bid for Macy's stalls. More than a month after it approached Macy's with an offer, the Canadian owner of Lord & Taylor and Saks Fifth Avenue has been unable to raise the equity financing necessary to buy its US rival, according to a report. The complication may come as a blow to Hudson's Bay's owner and executive chairman Richard Baker, who had hoped to leverage Macy's covetable $18 billon real estate portfolio.

Jimmy Choo boosted by China and demand for menswear lines. The British luxury shoe brand posted a 14 percent rise in revenue on the back of strong demand for its menswear category, which accounted for 9 percent of its sales in 2016, and strong growth in Asia, which helped offset a planned reduction of its wholesale business in the US. The company is the latest in a line of fashion companies to report on the improving outlook for the luxury market.

Agent Provocateur in bailout deal with Sports Direct. The lingerie brand has entered into administration and will be sold to Four Holdings, an investor group backed by Mike Ashley, founder of Sports Direct, in an unlikely deal that has raised eyebrows. The deal is part of the UK sports retailer's plans to focus on a more premium offering by acquiring fashion labels.

PEOPLE

Natalie Massenet with José Neves, founder and CEO of Farfetch | Source: Farfetch

Natalie Massenet joins Farfetch as Non-executive Chairman. Nearly a year and a half after her surprise exit from Net-a-Porter, just ahead of its merger with Italian rival Yoox, Massenet confirmed this week she is joining Farfetch as non-executive chairman. The move puts Massenet in direct competition with the fashion e-tailer she founded in 2000 and follows reports at the end of last year that she was in talks with the José Neves' fashion e-commerce platform.

Franca Sozzani remembered at Milan Fashion Week. The much-loved Vogue Italia editor-in-chief, who passed away in December, was given a high-powered fashion farewell at the close of Milan Fashion Week, with a memorial held in Milan's Duomo. The tribute was attended by leading figures from across the industry, including fellow Vogue editor Anna Wintour, who was a longtime friend of Sozzani, as well as Kate Moss, Naomi Campbell, Phoebe Philo, Stella McCartney, Valentino Garavani, Rita Ora, Christopher Bailey, Jonathan Newhouse, Mario Testino, Donatella Versace and Giorgio Armani.

Calvin Klein hires Luella Bartley. The British fashion designer, who made her name as head of women's ready-to-wear at Marc by Marc Jacobs, has been appointed head of global design for Calvin Klein Jeans, reporting to Raf Simons' right hand Pieter Mulier. Bartley's appointment comes at a time of transition for the iconic brand, whose creative strategy is now being led by Simons, who debuted his first collection for the brand in February to acclaim by industry insiders. How the new strategy resonates with the all-important end consumer remains to be seen.

Brioni CEO exits. Gianluca Flore has stepped down from his role as chief executive of Brioni, just months after the departure of creative director Justin O'Shea in October. The news comes at a time of transition for the company, which is attempting to establish itself as a leader in luxury menswear. A new CEO has yet to be announced.

Rebekka Bay departs Everlane. Less than two years into her tenure as head of product and design at Everlane, the designer has exited the company to join Finnish design house Marimekko's board of directors. Bay, who made her name launching COS and was once tasked with reinvigorating iconic American retailer Gap, was Everlane's first star hire in 2015.

TECHNOLOGY

Shares spike as Snap goes public​. The visual messaging company priced its long-awaited IPO at $17 a share, giving Snapchat a valuation of $24 billion and making it the most valuable American technology company to go public since Facebook. In its first days of trading, Snap's share price spiked as much as 69 percent above its IPO price. Investors have been attracted to the company, which debuted on the New York Stock Exchange on Thursday, by its highly-active millennial user base and growing advertising revenue.

Lyst partners with Vestiaire Collective. Fashion aggregator Lyst has partnered with luxury "re-commerce" site Vestiaire Collective to make pre-owned fashion available on the Lyst platform for the first time. The company said the decision was driven by strong demand for luxury brands like Chanel, which has limited online distribution. For Vestiaire, which is battling for dominance in the challenging luxury resale market, the venture will open itself up to new consumers.

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