Bloomberg Businessweek

 BUSINESS Bloomberg Businessweek March 11, 2019

years Sarah Jessica Parker, Scarlett Johansson, and

other top talent stepped out in opulent Dolce &

Gabbana gowns, no A-lister dared to risk alienating

fans by donning the label. “They basically offended

an entire country,” says Leaf Greener, a stylist and

fashion consultant based in Shanghai and Paris.

“Who wants to associate with that?”

With Chinese shoppers estimated to account for

at least a third of luxury sales and two-thirds of the

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○ Dolce & Gabbana offended Chinese women. The furor on the mainland, where luxe brands rule, hasn’t abated

When the Hand That

Feeds You Bites Back

From the red carpets of Hollywood award shows

to the catwalks of Paris and Milan, where throngs

of photographers chase Instagram-worthy shots of

actors, pop stars, and style bloggers sporting the

latest look, winter is the season when Gucci, Louis

Vuitton, Versace, and other luxury brands make a

big business of being in the spotlight.

One name has been notably absent from this

year’s glamour parade: Dolce & Gabbana. The iconic

Italian brand is still struggling to overcome a back-

lash that erupted in November over a tone-deaf

marketing video and derogatory comments from

co-founder Stefano Gabbana about the Chinese.

What’s followed is a boycott on the mainland that

threatens to snuff out one of fashion’s biggest names.

Online retailers such as Alibaba’s TMall and

Richemont SA’s Yoox Net-a-Porter still haven’t

reintroduced Dolce & Gabbana on their Chinese

sites; Lane Crawford and other high-end depart-

ment stores pulled the brand’s wares from their

stores on the mainland; and the spring issues of

influential local magazines like Vogue China feature

no D&G ads or products.

The damage hasn’t been limited to China. At both

the Golden Globes and the Oscars, where in previous

to backstop small businesses in case of chaos,

according to a banker involved in the discussions.

Her Majesty’s Revenue & Customs, the U.K.’s

tax, payments, and customs authority, has already

issued complicated import and export guidelines,

including a recommendation to hire agents to help

in case of a no-deal Brexit. Many companies, already

suffering from anemic growth, aren’t willing to take

on more costs. “We will cross that bridge when we

get to it,” La Torre says. “We are not going to get

ahead of ourselves and assuming extra costs unless

strictly necessary.”

Ponan is trying her best to bolster her organic-

snacks business against all the uncertainty. “We

are holding a lot more stock than what we would

normally hold,” she says. “We had to take more

space in terms of external warehousing. But of

course, with perishable products, you don’t want

to hold too much.” Companies like hers usually set

aside some funds. But that cash was meant to be

invested to increase exports, not for crises such

as Brexit. “Will goods be stopped at the borders?”

Ponan asks. “Will there be limbo? We need to know

if there will be deals in place that we can make

use of.”—Stefania Spezzati and Charlie Devereux

THE BOTTOM LINE Many of the U.K.’s 5.6 million small and midsize

enterprises aren’t ready for the delays, new documentation, and

liquidity problems that may arise when the country leaves the EU.

 The video of a

Chinese model

struggling to eat pizza

sparked outrage