When you are closely associated with a brand, your personal reputation and behaviour impacts the brand directly. This fact became amply evident when John Galliano went on a violent anti-Semitic spree while drunk at a Paris bar and an embarrassing video surfaced in the aftermath. John is the lead designer at Christian Dior Couture and the famed fashion house fired him immediately as a damage control exercise. In the immediate term the brand has taken a hit because of the embarrassing incident.
There has been a mixed reaction from the industry. Prominent fashion icons have risen to John’s defense. But there are others who feel that Dior has done the right thing and barring a hiccup the brand will survive the incident. When you are a public figure representing a design house of the calibre of Dior, you can’t afford to say things like that even in jest. And if you do, you should be prepared to face the consequences.
Dior’s stock price has taken a beating since the news of the incident surfaced. It hit a low of $140.99 but recovered somewhat to $142.87. People who have been holding the stock for over a year will not be affected much as the stock was trading at less than $80 in March 2010. The bigger dilemma facing Dior is John Galliano’s personal brand in which the company holds a 92% stake for which it had paid $23.6 million in January 2008.