Balenciaga, Demna, and the End of the Like Era
Has the cycle of popularization of the luxury market reached its limit?
For a long time, the luxury market sold products and maintained close, almost familial relationships with its clients. The goal was for people with sufficient purchasing power to frequent their stores and events. This was a remnant of the protocols of the French court: only the king's friends had access to the best. Communication was directed at a small, select circle that included Hollywood, aristocrats, royalty, and magnate heirs. Stories of tradition and extravagance, the education to perceive refinement, and the relentless pursuit of perfection were part of an exclusive world, made for very few. The middle class interacted with major luxury brands aspirationally and imitated their customs through magazines and newspapers. Poor people lived in a separate world. World War II ended, rock music played, television arrived, and youth began to wear jeans and t-shirts. Between the 60s and 70s, Pierre Cardin, Yves Saint Laurent, Dior, and even Chanel began expanding their businesses by selling ready-to-wear clothes (prêt-à-porter) at Le Bon Marché. Luxury fashion was leaving the haute couture ateliers, but its clientele was still composed of the Euro-American elite with "good taste."
In the 80s, a bolder positioning was initiated by the world's richest man today: Bernard Arnault. He left socialist France and ventured into real estate in the United States. According to legend, while taking a taxi in New York, he asked the driver what he knew about France, and the response was: “I don't know who the president is, but I know what Dior is.” Most taxi drivers at the time might have answered Platini (a soccer player), but this one answered Dior. Despite being unconvincing, the story is good to justify the beginning of the empire that followed. Arnault bought the failing Agache-Willot-Boussac in 1984, a holding company that owned Christian Dior and Le Bon Marché, for 1 French franc (approximately 14 cents at the time) and fired 9,000 people, starting the restructuring process.
The 80s were unique in the United States and quite different from the French way of doing business. It was during his time there that Arnault anticipated that the luxury market needed to change to adapt to a new economic moment: globalization and the Wall Street explosion. Ronald Reagan's government deregulated financial market restrictions, and the introduction of computers to trading desks created a new speed for data analysis and stock trading. The wolves of Wall Street were brokers without pedigree who transformed overnight into millionaires seeking ostentation. Arnault quickly understood who would be willing to buy “aristocratic prestige” and began to engineer what became known as “mass luxury.” In no time, he himself became the “The Wolf in Cashmere .”
Also in this decade, a new figure began to consolidate in the fashion system: the creative director. More and more, brands ceased to bear the signatures of their founders and began hiring employees to play the role. An example is Karl Lagerfeld, who was appointed creative director of Chanel in 1983.
THE HIGH LOW
The internet, the expansion of the press, and open market policies brought a new relationship with national borders in the 90s, making it easier for European and American brands to expand their alluring stories to a much larger number of consumers. The most important word in business was "scalability." Anna Wintour's first cover for Vogue was published in 1988, featuring model Michaela Bercu wearing a Christian Lacroix haute couture jacket paired with faded Guess jeans. The true groundbreaking moment.
Gradually, the communication that generated desire for a select group of customers, frequenting stores in the world’s most valuable capitals, began to conquer people in the suburbs and developing countries, not necessarily wealthy by birth. Just as sports brands were booming globally by selling the merits of the self-made man, luxury brands realized they were missing out on a significant market: the ordinary citizen. At this point, potential luxury customers were considered to be people who could save for years to finally buy a bag or those who would go into debt with endless installments to flaunt a mere perfume. Who doesn’t remember Sex and the City and Carrie Bradshaw, with no money for rent but 300 pairs of Manolos in the closet? It was in this same decade that Chanel, under Karl Lagerfeld, began to include jeans, biker jackets, and the Duma backpack in its portfolio.
The brilliance of Arnault and other CEOs of luxury houses was to be “haute, without being arrogant” (as written on Wintour’s Vogue cover) and to start enchanting every human being with access to media. They created a portfolio of accessible products with high-profit margins: glasses, bags, perfumes, t-shirts, hoodies, jeans, etc. The principle of any luxury business is to create an imaginary desirable life, to the point where you forget the cost and simply feel the experience of power, something the French court has masterfully done since Versailles.
In the 90s, this strategy of making fashion even more accessible required a new type of creator, someone who spoke the language of the streets and could interpret their desires. Arnault moved quickly and made two young, early-career stars. In 1995, Galliano (son of a machinist) and, in 1996, McQueen (son of a taxi driver) began to lead the group’s main brands, Givenchy and Dior. Arnault and his family built their empire by marketing the main French product: luxury. Whether it is a jewel, a dress, a hotel, a restaurant, but mainly an aspiration for non-heirs, the “average” human being.
FROM GALLIANO AND MCQUEEN TO DEMNA
So far, I have told the story of Bernard Arnault, controller of LVMH (Louis Vuitton Moët Hennessy), while Balenciaga is in the portfolio of his closest competitor, Kering, owned by François-Henri Pinault. However, Pinault entered the luxury market only in 1999, in a battle with LVMH for Gucci. He won and in the same year purchased Yves Saint Laurent and Boucheron. By 1999, Arnault had already acquired Louis Vuitton, Givenchy, Berluti, Kenzo, Guerlain, Celine, Loewe, Marc Jacobs, and Sephora. Despite being late to the race, Kering made significant acquisitions in 2001, including Bottega Veneta and, the reason for our text, Balenciaga.
Market analysts say that Arnault managed to reach the top of the list of the world’s richest men by combining the power narrative of the European luxury market with the expansion strategy of the American market, quickly becoming a global reference. As the magnate himself mentions in a video, Steve Jobs in the 2000s sought his retail strategy advice. Jobs wanted to open Apple stores next to Louis Vuitton. Arnault applauded Jobs’ strategy of transforming a mere utility object into an article of social distinction, despite everyone labeling him as crazy.
While keeping a sharp eye on the technology market, which was growing rapidly, not even Arnault could foresee the impact of social media and apps on the global structure. He didn’t manage it because even Silicon Valley didn’t anticipate what Facebook would become. By luck or instinct, when social media became popular, he was more than prepared; in fact, social media perfectly aligned with the idea of “democratization of luxury.” Not coincidentally, it was with social media that the Arnault family’s fortune soared.
Mark Zuckerberg founded Facebook in 2004 and bought Instagram in 2012 with 30 million users. After three years under new management, Instagram reached 370 million monthly active users. In this new era of global communication and content generation, François Pinault did not lag behind. Just as Arnault hired McQueen and Galliano in the first phase of globalization, the owner of Kering made a perfect move by hiring Demna Gvasalia to take over as creative director of Balenciaga. It was 2015, and the global fashion scene was driven by likes, Kanye, and Kim.
THE MEETING OF LUXURY WITH THE MASSES
The global elite is not the audience of social media. Wealthy heirs in Brazil keep their accounts private. Abilio Diniz said he preferred traditional communication, as did João Moreira Salles, and Caetano delegates his account. The driving force of social media is the popular. Soccer players, pop singers, comedians, and, in fashion, influencers who teach how to look rich. Part of this literacy on what is “good” focuses on explaining the value of brands and how they help you be perceived differently when entering a mall or attending a brand event. The narrowing gap between the world of luxury and the reality of most of the world’s inhabitants would have been unthinkable a few years ago.
We were no longer talking about suburban middle class (the Carries); now, luxury communicated with the C and D classes of countries with enormous economic challenges. In this meeting of worlds, it is really not easy to explain how a leather bag with golden hardware can cost more than the house a person lives in. How to watch a hyper-conceptual haute couture show at a bus stop and think it’s normal? It’s laughable and makes you wonder: “What kind of outfit is this?” as Jojo Todynho (already rich) did when watching one of Margiela’s shows a few years ago.
This first clash of the mass population with high fashion resulted in many memes, and the maisons, once again, had to adapt. But where there is poverty, there is the desire for a better life, and the motto of the group created by Arnault is: “For a dream, there is no price.” (NYT, 2023)
Demna has always been inspired by subcultures that challenge traditional rules of etiquette and exclusivity. His creative process is imbued with mockery. This is his signature. He was essential in bringing European fashion closer to a new pop culture, built in a raw manner and with low formal technique, that emerged on social media from 2010 (the year Instagram was launched). In 2014, he founded Vetements with his brother, which was an immediate success. Vetements means clothing. Straight to the point. Without pretense, the idea was to bring to the runways the harshness of the real world, the oddities of hyper-capitalism, politics, and the truth of the streets. The Gvasalia brothers understood the emerging ethos of new media: to be popular.
In 2015, Vetements was one of the finalist brands for the LVMH Prize alongside Arthur Arbesser, Coperni, Craig Green, Faustine Steinmetz, Jacquemus, Marques’Almeida, and Off-White. Vetements did not win, but in the same year, Demna was elevated to creative director of Balenciaga. He was the perfect choice for the hype that fashion needed to create to survive in a new economy that traded not only tangible products but primarily accessibility and data.
THE INCLUSION MOVEMENT AND THE DATA ECONOMY
The first decade of Instagram was about inclusion. Since 2012, not only the former Facebook group but all the major big tech companies have injected trillions into the diversity movement. After all, these networks trade in data, and in this business model, your purchasing power doesn't matter as much as your mobilization power. Whether dancing, sharing your life, making jokes, exposing violence, criticizing political actions, gossiping, or advocating causes, the model profits from engaging content that keeps people scrolling through their feeds. The more diverse the platform's users, the better the identity segmentation for advertisers. Therefore, being precise about the micro singularities of your identity is gold for advertising sales and, as we know, also for selling information to governments and political parties. Think about it: today, a person may have never been to the dentist, but they have a social media account.
This market expansion of networks and the inclusion of people previously marginalized by the luxury market made Demna's products perfect for the moment. The first enormous success of this new fashion ethos happened still at Vetements. On October 1, 2015, a model walked the runway for the Gvasalia brothers wearing a DHL t-shirt. The uniform of the most ordinary postal delivery worker became the most important fashion product of 2016, sold for 185 British pounds, which is about 1,000 reais today.
“It is different from most luxury brands, which seek to be more exclusive—something not everyone can have,” says Karen Van Godtsenhoven, associate curator at the Costume Institute of the Metropolitan Museum of Art and specialist in Gvasalia’s work. “He creates clothes for a raver, a businesswoman, a security guard, and it’s a more democratic approach, saying that all these are equal types.” (Vogue US, February 2020)
The inspiration for the products wasn’t drawn from museum halls or the upscale areas of cities, but from everything that had been made invisible. Today, his first show at Balenciaga (Fall 16) seems much less shocking than at its debut, but one only needs to look back a single season and compare it to the previous one, signed by Alexander Wang, to understand the change. In Wang’s show, a parade of brides in white satin; in Demna’s show, gothic platforms, puffer jackets, and North Face-style winter coats. The rebellious DNA and the talent for constructing complex forms won over the critics. In the early collections, the images went viral and captivated pop stars. At Vetements, Demna exercised more freedom; at Balenciaga, the initial shows were more restrained and relatively faithful to the luxury market’s refinement. Gradually, this changed, and Demna began bringing Vetements’ aesthetics to the maison. This was perhaps driven by business pressures as the meme-products flew off the shelves. Demna left the family brand in 2019, faced a public feud with his brother, who accused him of copying Vetements, and in 2021, he dropped his last name, presenting himself solely by his first name.
The success started at Vetements brought great visibility to Balenciaga. The runway references were recognizable to people from different backgrounds, and this mix was amusing in its oddity—ready-made memes. With this strategy, the fashion world began to permeate the imagination of every deprived alleyway in the world. Demna may not have been fully aware of this entire mechanism at the beginning; perhaps he was just feeling the zeitgeist of the moment. However, he always made his understanding of the fashion system clear and, like the popular audience, thought he was promoting a revolution when, in fact, he participated in the expansion of French colonialism worldwide. Nothing better than an activist to engage the public on social media.
“Comecei a Vetements em um período em que, através da internet, a raiva dos jovens se tornou relevante novamente, e eu tinha muita raiva”. (032c, 2016)
THE REVOLT OF MILLIONS
Bringing the rebellious subculture's perspective from the streets to Balenciaga was a risky move that generated considerable figures. "Streetwear"—hoodies, sneakers, t-shirts—are cheap to produce, and with the Balenciaga logo, the markups exceeded double digits. In 2017, Balenciaga experienced phenomenal success, especially with accessories like the Triple S sneaker, nearing €1 billion in annual revenue. In 2018, three years after Demna took over, sales doubled, and social media was abuzz with Balenciaga. The maison was considered one of the fastest-growing brands in the market. "Since he carefully creates clothes that people really want to wear, he has engaged with a new generation of customers who are more open to mixing and experimenting," said his delighted boss, François-Henri Pinault, in 2020. However, those who argue against Demna by saying he prefers popular products because he doesn't know the techniques to make high-quality clothes are mistaken. On the contrary, he is an exquisite craftsman of fashion, and precisely because of his tailoring, finishes, and quality, he has been able, like few others, to enchant critics, fashion historians, entrepreneurs, and the "people" with his shows.
In 2021, the brand continued to grow, with Kering reporting a 35% increase in revenue in the first quarter of the year, highlighting Balenciaga as one of the group's strongest performers during this period, and Demna received a gift. The haute couture collections, previously signed only by founder Cristóbal Balenciaga, would once again be showcased under his vision. The system is ironic. After 50 years, Balenciaga would return to haute couture presenting jeans, t-shirts, and some iconic forms from the brand's past. Cristóbal ended his activities in July 1968, just two months after the eruption of the student movement that, together with political parties, took over Paris demanding the ousting of the conservative Charles de Gaulle and the renewal of customs values, especially sexual freedom. Already in poor health, Balenciaga closed his doors disappointed with the new directions of fashion, which was moving away from the perfectionism of haute couture and closer to the street. However, from 1968 to 2021, a lot has changed, and the word of the moment in fashion was the popular "like."
"I don't tweet, thank God, nor do I do anything of the sort. I make clothes. For me, likes on Instagram are as irrelevant as making a product and then conducting a survey about what people think of it. For me, product design is about believing in something; it's about feeling. And in the past, my intuition has always led me to the right places."
Despite claiming to be immune to likes, Demna’s products flew off the shelves at the speed of a click. Success, however, didn’t seem to taint the creative activist who remained resistant to the vain temptations of the fashion world. In 2017, he married French musician and composer Loïk Gomez and moved to a chalet in the Swiss forest, seeking creative distance from the fashion hub of Paris. He became a vegetarian and started exercising, returning to Paris only once a month for fittings. Unlike his predecessor at Balenciaga, Nicolas Ghesquière—one of the longest-serving creative directors at major luxury brands today—who is rumored to work 24/7, Demna told Vogue in 2020 that he worked only three days a week for Balenciaga, spending the rest of his time indulging in creative pursuits like concerts, exhibitions, and osteopathic treatments.
GEORGIAN SNIPER
In October 2019, journalist Isabel Junqueira and I dedicated an episode of the High Low Podcast to discuss the meteoric rise of Balenciaga. The title, “We Need to Talk About Demna,” was an allusion to the film “We Need to Talk About Kevin,” where a boy has a love-hate relationship with his mother. Kevin grows up in a perverse system of affection and resentment until he eventually starts shooting everyone. That’s how we saw Demna in his relationship with fashion. Love and disdain. A runway show featuring DHL delivery uniforms during Paris Fashion Week was him shooting in all directions.
In the episode description, we wrote: “He was born in Georgia, studied in Belgium, worked in Paris, and turned a mail delivery uniform t-shirt into a luxury item on the global market. Demna Gvasalia has been at the helm of Balenciaga since 2015 and has imprinted the marginal life of everyday streets in the leading luxury and lifestyle magazines. A creator who understands the system at its most structural level, he uses his position to make fashion history forever. It’s weird, it’s strange, it makes you think, and that’s why we need to talk about Demna.”
The collaboration with DHL was so surprisingly successful that most brands tried to copy the strategy, as Aleksandra Szymanska, Art Director at Aesop, said on DHL’s website in 2022. “In the Instagram era, the rules of the fashion game are changing. The ostentatious logomania that was so popular in the nineties is being replaced by visual statements – Moschino with its McDonald’s sweater; Anya Hindmarch with her Kellogg’s bag. They are hacking the fashion system and are credible enough to make these declarations of capitalist kitsch.” (DHL, 2022)
THE FALL OF CAPITALIST KITSCH
Capitalist Kitsch. It’s a way to describe Demna’s style and Balenciaga’s meteoric success. But after a decade, the formula needs to be renewed—the fashion system thrives on replacements—and Demna doesn’t seem willing to do that. The brand’s most recent shows have gone viral for the wrong reasons. The formula seems to have run its course. With social media, luxury brands managed to infiltrate their desire machines into the most diverse social realities. Today, you can still find a Balenciaga supermarket tote, made from the finest calf leather, for R$ 23,000, or the famous towel skirt for a modest R$ 8,000 in Brazil. But Demna has changed. And so has the world of social media.
The fashion system seems to have moved beyond the idea of “democratization.” Perhaps because the hyper-hyped influence market started to filter out its real talents and the money that paid for trendsetting products has dried up; perhaps because economic hardships have turned the disenchanted into conservatives; perhaps because the luxury system has grown tired of scandals, excesses, and the common people. It’s not that the luxury world ever genuinely liked seeing snack bags in their windows or dealing with third-world sub-celebrities, but money is money. And the money from inclusion and diversity marketing has started to disappear.
Additionally, the infamous scandal involving photos of children with Balenciaga, which occurred in November 2022, made the brand an example of repudiation in the religious world. The controversy that almost brought Balenciaga down stemmed directly from two advertising campaigns—one featuring child models holding “BDSM teddy bears” and a subsequent campaign (for the spring/summer 2023 collection), starring Bella Hadid, Isabelle Huppert, and Nicole Kidman, which showed a Balenciaga x Adidas bag positioned on top of a stack of papers, including a page from the 2008 U.S. Supreme Court decision in the case of U.S. v. Williams. This case considered elements of the First Amendment in connection with a conviction for child pornography. The campaigns generated public outrage and affected an important audience for the high-end product market. Demna claims not to understand how the two campaigns had these related incidents.
On February 9, 2023, Demna gave an interview to Vogue titled “Demna Recorded: The Balenciaga Designer on the Brand’s Controversy and His Path Forward,” where he had the opportunity to apologize. The determined man who in 2019 said he didn’t care about likes or other people’s opinions was now even more reclusive and visibly struggling to regain his shaken confidence. The first part of the interview is a repertoire of self-responsibility and questioning how everything could have happened without any warning. The second part, however, provides a vision of the future and a somewhat confusing statement about the director’s connection with pop culture:
“To be very honest, I’m not interested in pop culture. Yes, we have become part of it, somewhat unconsciously on my part, and that’s okay, but I can’t say that my creative vision or design approach has been influenced by it. It came to us, not the other way around.” The reporter, confused, asks him to elaborate: “Can you talk more about the role of pop culture in your work for the maison? Because, from the outside, it sometimes seems that Balenciaga has positioned itself to be part of pop culture quite consciously and deliberately.” He continues: “Often, in my work, I reference things that are somewhat mundane, relatable, and easy to understand, and over time, this approach is why we became associated with pop culture. Of course, there is also the aspect of celebrities, but I have to say that I never thought about dressing celebrities or directing my designs towards them. In fact, I was quite against it for a while until the brand grew to a point where it was inevitable [that we would work with them]. For me, the whole notion of pop culture is really… it’s popular; it appeals to many different kinds of people. And the brand’s part in pop culture has been very beneficial for Balenciaga in terms of visibility and, consequently, obviously, for commercial success: the more you appeal to or impact more people as a brand, with your language and your aesthetics, it impacts your business.” (Vogue.com, 2023)
From this interview, we can see how the relationship between fashion creator and fashion business often occupies opposing fields. When things go wrong, however, it is the creative director who is remembered for the defeat. In the article, he says that he never wanted to dress celebrities (and I believe him), but the fashion system dictates what will be done. In July 2022, just seven months before this reflection in Vogue, Balenciaga’s 51st haute couture show had a cast including Kim Kardashian, Nicole Kidman, Naomi Campbell, Dua Lipa, Bella Hadid, and Christine Quinn. It was also Kim’s first time on a runway, and she told the press that the experience was “a dream come true.” November brought the campaign scandal, and in December, all the celebrities cut ties with the brand and consequently with Demna.
“DESIRABILITY”
In September 2023, when Bernard Arnault reached the top of Forbes for the first time, journalists Liz Alderman and Vanessa Friedman published an article about the achievement. It’s interesting to note the relationship some countries have with the paths of money and power: “In France, Mr. Arnault has become a lightning rod for anger over rising economic inequality. In April, 10 days after Forbes placed him at the top of its annual list of the richest people, protesters stormed his office in Paris during national strikes against raising the retirement age. His effigy was burned as a symbol of capitalist evil.”
As he himself says in the article: “France is not a country motivated by business success, unlike the United States.” He adds that when his friend Warren Buffett walks around Manhattan, “he’s like a Beatle.” But when Mr. Arnault visits his stores in France, “I have to be careful,” he said. “I don’t like it, but I need security.”
“Desirability” is the most popular word at LVMH. But this highlights a potential problem, as one of his executives said: “A consumer waking up and saying, ‘You know, I’m buying this product, but someone is making so much money off it. Is it desirable that you are buying a product from someone who is the richest man in the world?’”
If in France being a billionaire is a problem and in the United States the status elevates a person to celebrity, other countries have an even more controversial relationship according to the same executive:
“When Mr. Arnault visited China, one of LVMH’s most lucrative markets, the headlines of ‘richest man,’ from months earlier, earned him a rock star reception. In Shanghai and Chengdu, crowds followed him and scrambled for selfies. Mothers asked him to bless their babies. ‘Like the pope. Can you believe it?’ He was called, he said with a laugh, ‘the God of Fortune.’” (NYT, 2023)
It’s been 40 years since Bernard Arnault bought Dior after his stay in the United States. It’s been just over 20 since Kering bought Balenciaga. Instagram turns 14 in October this year. Demna has been at the helm of the centenary brand for 9 years. All of these, and not just them, were fundamental to the phenomenon of the “democratization” of the luxury market. Social media included people previously excluded from the high fashion conversation and became a desire for those struggling to pay essential bills.
Today, you encounter homeless people flaunting pirated versions of Chanel, Gucci, Prada, Louis Vuitton, and Balenciaga. It’s an image that makes you dizzy: hunger dressed in the trappings of the fashion system. What’s important to analyze is how this happened. With the apparent decline of social media as we know it, it remains to be seen whether the luxury market will somehow close itself off again to maintain its values of distinction.
A business is made of markets, and in recent decades, social media included a global audience eager to be part of this dream of power. Now, post-scalability, followers seem to have grown tired of memes. The current fashion system is once again reorganizing. In February this year, the brand of millionaire sisters Mary-Kate and Ashley Olsen banned cell phones from their show.
It’s important to note that the owners of all conglomerates continue to have the same profile in terms of race, gender, and sexuality in their historic power holdings. In a way, they remain the truly empowered. The American Forbes magazine has been publishing its billionaire list since 1987. In the first edition, there were 140 names; today, the list has 2,781, with 69 being Brazilian. François-Henri Pinault is ranked 54th, and Bernard Arnault and family are at the top of the list.
Perhaps Demna has realized the place of his rebellion and that’s why he chose a guided meditation as the soundtrack for the latest haute couture collection. But, perhaps, there’s no reason at all.