Balenciaga. The name alone used to conjure up daring runway looks, street-savvy edge, and an invitation to the top of high fashion. But then, at the close of 2022, the iconic fashion house found itself at the center of one of the industry’s most shocking controversies — and it’s been scrambling to recover ever since.

So what happened to a brand that was once touted as one of the hottest on Lyst’s Index? And most crucially, is there a way back to relevance?

Let’s rewind and break it all down.

Balenciaga’s Meteoric Rise: The House That Broke Fashion Rules

Balenciaga’s origin story is like a fashion fairytale. In early 20th-century Spain, the house was founded by Cristóbal Balenciaga and built its reputation on elegance, structure, and craftsmanship. Cristóbal — whom Christian Dior would refer to as “the master of us all” — established the spirit of innovation long before the digital era began.
But it wasn’t until the 2000s that Balenciaga found its second wind.

• Creative Vision That Redefined Fashion: Under Nicolas Ghesquière, and then Demna Gvasalia, Balenciaga became a cultural force. From platform Crocs to oversized puffers, Demna produced not just clothes but fashion critique. His work was a mashup of runway couture and streetwear, of irony and artistry.
  And in 2022, Demna staged a show in a mud pit (yes, really) that was a more literal depiction of “surviving the dirt of life” — and the people gobbled it up.
• Celebrity Culture + Streetwear = Gold: From Kim Kardashian’s dress-up tape outfit at Paris Fashion Week that covered her entire body, to Kanye West’s many Yeezy x Balenciaga collaborations, the brand was ubiquitous everywhere. Balenciaga became the go-to name among Gen Zs from Chicago to Seoul— and especially for fashion-forward icons like Angie and her followers.
  And it worked – Balenciaga was the #1 hottest brand in the world on Lyst’s Q3 2022 Index. That kind of cultural capital? Priceless.
• Digital Domination: Whereas other luxury homes held back on TikTok, Balenciaga jumped in. Its jaw-dropping campaigns, surprise collabs (Crocs, Fortnite, The Simpsons), and mysterious Instagram drops made it viral catnip. BoF noted that Balenciaga’s online activity in 2021 outpaced Gucci and Louis Vuitton in certain corners.
  But as fast as it grew, it all came crashing down.

The 2022 Ad Campaign Scandal: A Masterclass in What Not to Do

In November 2022, Balenciaga launched two ad campaigns that backfired in catastrophic fashion.

• The “Gift Shop” Campaign: Photos showed children holding teddy bears wearing BDSM-style clothing — leather harnesses, chokers, mesh tops. What was probably intended as satirical art soon sparked international outrage. Critics, consumers, and watchdog groups accused Balenciaga of child sexualization. Social media went haywire. #CancelBalenciaga was trending for weeks. Backlash videos, memes, and investigative threads overflowed TikTok, Twitter, and YouTube.
• The Spring 2023 Campaign: As though all this were not enough, another campaign included a Balenciaga x Adidas bag draped over papers, one of which happened to be a Supreme Court decision regarding the laws concerning child pornography. Whether it was an accident or a mistake, the positioning raised eyebrows and encouraged conspiracy theories. Abruptly, the brand was not merely controversial — it was toxic.

Crisis Mismanagement: When Silence Says the Wrong Thing

Rather than move forward with responsibility, Balenciaga pointed fingers at everyone else — the production company, the set designer, anyone but themselves. A $25M lawsuit was brought (and then abandoned), but the harm had been done.

Worse still, the brand fell silent on social media. No response. No explanation. No apology — until it was much too late.

Case Study: Harvard Business Review points out that brands confronted with PR crises need to be seen taking action within 48 hours to regain narrative and trust. Balenciaga took weeks, letting conspiracy theories go unchallenged and consumer outrage compound.

The Fallout: Numbers Don’t Lie

• Lyst Rankings Plunge: Balenciaga fell from #1 in Q3 2022 to #11 in Q4, and by Q1 2023, it had fallen even further to #18. What was once a high flyer became a cautionary tale in how quickly public favor can evaporate.
• Financial Slump: Parent group Kering SA announced in its 2023 annual report that Balenciaga’s sales in its core markets, especially the U.S., had plummeted. Retailers such as Saks and Neiman Marcus saw a steep fall in demand after the scandal.
• Celebrity Fallout: Several of Balenciaga’s celebrity endorsers — including Kim Kardashian — publicly distanced themselves. Others remained quiet, worried about reputational harm through association.

Can Balenciaga Recover?

Here’s the million-dollar question: Is the damage irreversible?

The Road to Redemption: What Needs to Happen

• Transparency & Accountability: Today’s consumers, particularly Gen Z, prefer authenticity to aesthetics. An honest, open pledge to change, not merely behind closed doors, is needed.
• Brand Reset: Certain fashion insiders are speculating that Balenciaga will take a season off, only to return with a strong, unequivocal message. It’s been done — recall Dior after Galliano? Redemption is achievable.
• Collaborations with Purpose: Rather than provocative stunts, Balenciaga needs to align with causes, especially child safety, fashion ethics, or creative openness, to restore public trust.
• Rebuild the Culture, Not Just the Product: Fashion is not about clothing anymore. It’s culture. It’s a community. Balenciaga needs to rebuild from scratch — with more transparent values, better leadership, and plenty of listening.

Final Thoughts: Cancelled or Comeback?

Balenciaga’s ascension was legendary. Its decline was operatic. And its future? Yet to be written. In a fast-moving, slowly forgiving world, the coming seasons will be decisive. Is a brand that once dominated the fashion zeitgeist able to move on from the scandal, or will it be forever seared in the memory books as the cautionary tale of excess fashion? Only time (and Instagram) will tell!