A Reputation Expert's Advice For H&M After Racially Insensitive Clothing Scandal

In an age of weaponized social media, when a brand like H&M Hennes & Mauritz AB ADR (OTC:HNNMY) releases an offensive advertisement, the shockwaves are felt around the world.

The clothing retailer often demonstrates that it undertakes corporate responsibility activity and works hard to convey a socially responsible message, but the latest “Jungle Monkey” ad displayed an extreme lack of oversight, reputational expert Nir Kossovsky told Benzinga.

The image in H&M's online store showed a black child wearing a hoodie with the text "coolest monkey in the jungle."

The retailer issued a statement Tuesday apologizing for the post and said it had been taken down, and that the hoodie was pulled from the market and will be recycled. H&M said the offensive post was an accident.

"Our position is simple and unequivocal — we have got this wrong and are deeply sorry," the statement said in part.

"Jungle monkey" was one of the most-searched terms online this week, according to Google search trends. For a company, good intentions aren't enough, Kossovsky said, adding that H&M's post shows that any systems that were in place failed.

"Either H&M really cared and someone screwed up, or someone from the inside [was] purposely trying to sabotage the company," he said.

Repairing A Corporate Reputation

A company can take four major steps to work toward restoring or repairing its reputation, Kossovsky said:

• Acknowledge that a process failed.
• Acknowledge that the company knows what the mechanism is that caused the failure.
• After identifying what went wrong so it won't happen again, explain how you're going to fix things and indicate how the company will share insight  with other members of the industry so that none of them will make a similar mistake.
• After fixing the process for the benefit of the company and the industry, let stakeholders know that the fix is credible and authentic. 

Endorsement Exodus Coming?

The Weeknd and G-Eazy, two of H&M’s highest-profile endorsers, have already left the company, and Sean "Diddy" Combs reportedly offered the model in the photo a $1-million modeling contract with Sean Jean. There's no word on whether David Beckham or Justin Bieber will continue to endorse the Swedish retailer.

The child model’s mother told critics to "get over it," the New York Post reported.

While H&M did apologize for the ad and acknowledged their processes failed, it remains to be seen if consumers feel the same way and if the damage to the fast fashion giant's reputation will be permanent. The brand has taken a beating on social media.

“Social media will take a screwup and take it around the world before your crisis management team gets out of bed,” said Kossovsky. “The younger demographic is very sensitive to these types of social issues and will make purchase decisions based on reputation and avoid a product that will not uphold their values.”

While Kossovsky thinks H&M will rebound from the major error, he said it's harder for companies to recover from a screwup in today's environment. 

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