HONG KONG — Dolce & Gabbana rejected claims that its staffers here made controversial comments or engaged in an action that put the brand in the middle of long-simmering tensions between local Hong Kong residents and big-spending Mainland Chinese shoppers. Reportedly more than 1,000 people assembled Sunday for a protest in front of Dolce & Gabbana’s Tsim Sha Tsui store on Canton Road, many of them bearing signs accusing the brand of discriminatory practices.

This story first appeared in the January 12, 2012 issue of WWD. Subscribe Today.

Local media reported that last month a Hong Kong resident attempted to take a photo of the outside of the store and was barred from doing so by Dolce & Gabbana personnel. At the same time, reports contended that Dolce & Gabbana did not, in turn, restrict Mainland Chinese tourists and foreigners from taking photos.

Referring to media reports regarding the incident, Dolce & Gabbana said that “controversial statements reported in the Hong Kong press have not been made by Dolce & Gabbana nor its staff, and we strongly reject any racist or derogatory comments. It is regrettable that Dolce & Gabbana has been brought into this matter, but we wish to underline that our company has not taken part in any action aimed at offending the Hong Kong public.”

A Hong Kong-based spokeswoman declined further comment on the incident.

Though the incident is a short-term dustup for the luxury brand, marketing experts say longer term the effects are negligible but touches on simmering resentments between Hong Kong residents and the steady influx of newly affluent Mainland Chinese.

The incident “highlights what’s been going on in Hong Kong for a long time now with the wealth gap. [There are] stories that mainlanders are coming in and buying property, making average home prices inaccessible. I think this has highlighted the wealth gap. People think ‘why is it that these stores come in. I can’t shop there. Why can’t I take a photo?’” said Ray Rudowski, regional director for crisis planning and training at Edelman in Hong Kong.

“[The] protest is not a warning to brand stores. It’s a warning to [the Hong Kong] government,” said Rudowski.

He doesn’t believe Dolce & Gabbana’s brand has suffered because the people who were protesting were not target customers.

Short-term, though, the brand may want to think about doing some community outreach to placate the community – local Hong Kong residents – he suggested. To overcome this kind of controversy, Rudowski said it’s important for the company to demonstrate to the public that they are part of the community and “not just catering to the rich.”

Simon Tye, executive director at Synovate in Hong Kong, also said he doesn’t see the incident having any long-term impact.

“Most major brands will have [incidents] like this,” said, recalling the negative publicity Hermes got in 2005 when Oprah Winfrey was refused entry into one of the luxury brand’s Paris stores.

Helping to correct mistakes in the Chinese market, whether real or perceived, are daily debriefings to go over issues and complaints as well as “mystery shopping” to help discover what needs to be improved, Tye suggested.

In the end, Chinese and Hong Kongers are more alike than not in their love of luxury brands, providing a boon to Dolce & Gabbana and other luxury retailers.

“While this may have some effect on the brand image and domestic sale in the short term, long term effects are unlikely as consumers’ love of luxury and peer pressure from both the local and international press, the fashion industry and friends/family alike is likely to be greater than the current event,” said Fflur Roberts, global luxury manager at Euromonitor International, noting how luxury consumers in Hong Kong and China are very brand-oriented.

The protests reportedly gained traction on Facebook after an Apple Daily reporter, who had heard about Hong Kong residents being barred from taking photos, allegedly tried to take photographs and was threatened by the store’s guards. Video of the incident was posted on YouTube. Harbour City, the shopping mall that houses the Dolce & Gabbana store in question, published an apology on its Facebook page.

“We regret what happened and we offer our sincere apologies to those concerned. This is a lesson learned…We have reminded our tenants about the public space usage on Canton Road and we have stepped up our training for staff.”

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