When a scandal scars a company's brand, the repercussions can be fatal.
American Apparel never recovered from the improper, some might say, criminal actions of its founder and former CEO, Dov Charney, whose exploits of sexual harassment forced the company's board to remove to him. American Apparel was de-listed from the New York Stock Exchange in 2015. It filed for Chapter 11 that October, and its successor returned to bankruptcy last November to sell its intellectual property.
Over the years, Nike (NKE) and Adidas (ADDYY) have had to navigate crises tied to the rough treatment of workers making their shoes in China and elsewhere. They also had to respond to the corruption scandal involving top officials at FIFA, soccer's international governing body, which they've long endorsed.
Yet unlike American Apparel, Nike and Adidas largely withstood the negative publicity.
21st Century Fox (FOXA) is betting that its advertisers and its viewers will stick with Fox News after the company on Wednesday dismissed star anchor Bill O'Reilly, some nine months after its longtime chairman, the imperial Roger Ailes, was forced out of the company also amid multiple allegations of sexual harassment and loathsome conduct.
"Scandals like this would destroy 99% of brands," said Drew Train, a managing partner at Oberland, a New York branding agency specializing in nonprofits and social responsibility. "If this is Nike's CEO and Michael Jordan in the 1990s, good-bye; hello, Reebok."
But Ailes' genius, or as Train said, his "evil genius," was to create an "enclosed media eco-system and position the network as the 'other' to the mainstream media." By doing so, Fox News is very likely to weather the media storm around O'Reilly's departure, a news story that The New York Times on Thursday put on its front page, roughly three weeks after a biting expose revealed the network and the anchor had paid women $13 million since 2004 in exchange for agreeing not to sue or talk publicly about the charges.
The decision to dismiss O'Reilly came after more than 50 Fox News advertisers including Coldwell Banker, Mercedes-Benz and pharmaceutical giants GlaxoSmithKline (GSK) , Bayer (BAYRY) and Sanofi (SNY) pulled their ads from The O'Reilly Factor, the most highly rated program on cable TV news for more than 16 years.