Hollister lands in hot water in South Korea

By Martha C. White, NBC News contributor

Surf-themed apparel brand Hollister, the self-proclaimed ?coolest destination for genuine SoCal style clothes,? is riding a wave of consumer anger after its launch in South Korea was marred by reports of racial insensitivity.

English-language site KoreaBANG reported that some of the four models?at the Abercrombie and Fitch Co.-owned brand?s South Korean grand opening in the Seoul neighborhood of Yeouido a little over a week ago flashed middle fingers during promotional photos and posted Facebook photos and comments mocking Asians? appearance and pronunciation of English.

"We sincerely apologize for the offense caused by these unauthorized, ill-considered actions,? the company said in a statement about the South Korea incident.??Abercrombie & Fitch (as well as Hollister Co.) has now completed the investigation into the facts and circumstances surrounding the inappropriate behavior. We reiterate that we do not tolerate inappropriate or offensive behavior on the part of our associates. As a result of the investigation, the company terminated the couple of associates involved."

It?s not clear, though, if the badly-behaving models were the ones who got the ax following the furor. When asked to clarify if the reference to ?associates? referred to the models in question, the company replied, ?We have no further comment.?

Eric Dezenhall, CEO of Dezenhall Resources and co-author of Damage Control: Why Everything You Know About Crisis Management is Wrong, says the proliferation of social media and mobile devices are a major reason why inappropriate behavior can mushroom so quickly into a PR nightmare for a company.

?it?s not that it didn?t happen years ago, it?s that you can?t hide today,? he said. ?There?s bad news and good news for Hollister. In this electronic climate this sort of thing spreads extremely quickly and you can?t get it back... The good news is this stuff tends to fade rather quickly.?

Hollister needs to apologize quickly and sincerely, then keep its head down and get back to the business of selling T-shirts, Dezenhall said. ?The solution to most crises is commercial success. If Hollister begins to have commercial success...everything else will recede.?

Paradoxically, the controversy possibly could help Hollister, said NYU Stern School of Business management communication professor Irving Schenkler. ?I think there?s a category for certain brands known as rebellious brands,? he said, pointing out that retailers like Calvin Klein and Nike have embraced provocative images and figures.

Dezenhall made a similar point, saying, ?The other thing to keep in mind is that there?s a hipness about the brand that inoculates them to some degree.?

One added wrinkle for Hollister is that since this was its introduction to the South Korean retail market, a negative first impression could stick with the brand image. ?It?s not like they?d been in the market for 20 years and someone did something stupid,? Dezenhall said. ?I think they have a problem but it remains to be seen if they have a crisis.?

Hollister parent Abercrombie & Fitch?has courted controversy before with its flagship brand, such as a 2002 line of T-shirts depicting Asian caricatures like ?Wong Brothers Laundry Service.? The company pulled the shirts after complaints mounted.

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