Brand Trump took another hit Tuesday with the shuttering of the Ivanka Trump business, underscoring that fashion and politics don’t mix — and that brands linked strongly to personalities are fraught with risk.
Eleven years after fine jewelry carrying the Ivanka Trump label hit the market, the New York-based brand said it was closing amid rapidly dwindling retail and consumer support.
Even though Trump officially stepped away from her company in January 2017, many continued to associate her with the brand she founded. Political rancor toward her family, a dwindling base of retail accounts, a widely vocal consumer boycott and a highly competitive apparel market all contributed to the brand’s demise.
Events unfolded quickly on Tuesday. The day prior, new buy-now accessories were being touted on the brand’s site.
In a statement issued by the company, Ivanka Trump said, “When we first started this brand, no one could have predicted the success that we would achieve. After 17 months in Washington, I do not know when or if I will ever return to the business, but I do know that my focus for the foreseeable future will be the work I am doing here in Washington, so making this decision now is the only fair outcome for my team and partners.”
She added, “I am beyond grateful for the work of our incredible team who has inspired so many women, each other and myself included. While we will not continue our mission together, I know that each of them will thrive in their next chapter.
Abigail Klem, president of the company, who took on the leadership role after Trump relocated to the Beltway last year, relayed a similar sentiment in a statement. She did not respond Tuesday to repeated requests for further comment.
Eighteen months ago when her father was sworn in as President of the United States, the brand was reportedly a $100 million business. Even that was a substantial decline compared to 2012, when Trump, who was then a “Celebrity Apprentice” judge, told WWD she expected sales to reach $230 million following her first fashion show at Lord & Taylor’s Fifth Avenue flagship.
The sportswear line was originally produced by HMX Group. Today, G-III Apparel Group makes the sportswear, dresses and coats. The Trump company plans to continue to honor its commitments through its licensing agreements and retail partners such as Lord & Taylor, Dillard’s Inc., Bloomingdale’s, Zappos.com, Amazon and Von Maur. The company said the shuttering of the business was driven by Trump’s decision to stay in the Beltway rather than the brand’s performance. Other recent indicators appear to suggest otherwise. Earlier this month, Hudson’s Bay Co. became the latest retailer to announce that it would no longer carry the label.
Executives at Ivanka Trump declined to say how many employees lost their jobs, or how large the retail base was Tuesday. Morris Goldfarb, chairman and chief executive officer of G-III, reiterated that the closing of the business was a strategy implemented by Trump’s company and that he would honor his obligations and ship through the end of the calendar year. G-III has held the Ivanka Trump license for sportswear, dresses and coats since December 2012 and it shipped its first collections for spring 2014. “It didn’t have the broadest distribution,” Goldfarb said Tuesday.
He noted that people working for Ivanka Trump at G-III would be reassigned to other areas of the business.
According to sources, the apparel collection got off to a good start, but after Donald Trump was elected President and anti-Trump sentiments ensued, the line suffered. Nordstrom bailed out of the collection in spring 2017 and said it wouldn’t carry it for fall 2017 and beyond. The retailer blamed the decision on performance, and a Nordstrom spokeswoman denied it was politically motivated.
The Ivanka Trump fashion and clothing brand generated at least $5 million for Trump via the trust she formed to control it last year, according to documents the White House released last month.
Just last week, the OEG revised its financial disclosure protocol for members of the executive branch, demanding more detail around the term “diversified” when reporting financial holdings. The update is to take effect next year.
“The apparel component was the strongest. It certainly peaked right around the election period (in November 2016) and into 2017,” one retailer said Tuesday. “The polished working women’s look she had was the big success. G-III had a great sense of the polished look. The interesting thing was that Ivanka started with footwear and then it was the apparel that really took off.”
While the President’s political views and decisions by retailers, one by one, to drop the Ivanka collection factored into the brand’s demise, there were also fashion issues contributing to some softness. As the retail source said, “Footwear peaked with dress pumps and dress shoes. Ivanka rode that wave. But then the whole category softened with the more casualization of footwear and the sneaker craze. There could have been more newness.”
According to another retail source, performance of the Ivanka collection “was definitely politically driven. The product was fine. Personally, I was surprised she decided to discontinue the brand, but I guess she doesn’t want to deal with the continuing controversy of it all and has other matters she wants to deal with.”
Doors in “red” states did well with Ivanka’s collection, while those in blue areas did not do so well, according to the same retail executive. “We kept ordering it for doors that were doing well with it. It was a door-by-door situation.…If Trump was not president, I believe the line would continue to exist. The brand would be viable for many retailers.”
Two market sources concurred that Trump’s 2012 forecast for the brand at around $230 million in revenues, excluding fine jewelry, which she considered a separate business, was a reasonable estimate.
Andrew Jassin, cofounder and managing director of Jassin Consulting Group, said, “It was previously well accepted by consumers when the Ivanka brand was positioned at Lord & Taylor and Macy’s, etc. It was hindered by its abandonment by the major stores, and eventually the licensees were forced to refocus efforts on what is doable. The handbag licensee, Steven Hedaya [Mondani Handbags] had a terrific business, as did G-III, but bad p.r. and dwindling support put the nails into the coffin.” Hedaya ended his agreement with Trump at the end of last year.
While her family name provided automatic brand recognition in starting a business, that association was also a major factor in its downfall. In 2016, the brand had distribution in 800 stores around the world. After years of building up her own company and cultivating her public image, which was geared for working women and mothers much like herself, Trump extracted herself from the organization to take a high-level, unpaid adviser role in her father’s administration. With an office in the West Wing, early supporters expected, or hoped, the first daughter might have her father’s ear, regarding equal pay, education, paid leave and other women’s issues that she had championed through her business. When that didn’t pan out, the public ire was roused.
In January 2017, some were encouraged when Trump hosted a dinner at her friend Wendi Deng’s Fifth Avenue apartment with such ambitious movers and shakers as Deloitte’s Cathy Engelbert, IBM’s Ginni Rometty, Tory Burch, Tina Brown, Goldman Sachs’ Dina Powell, Time editor Nancy Gibbs and Christy Turlington Burns. Equal pay, entrepreneurship, paid leave and education were said to be among the conversation topics with the influential group. In an interview with “Good Morning America” a few years ago, Trump said, “My advocacy of women trying to empower women in all aspects of their life started long before the presidential campaign did.”
When Trump started her business, she was a driven, single 25-year-old who graduated cum laude from the University of Pennsylvania’s Wharton School. (She followed in her father’s collegiate footsteps, as her father had also studied there, before going into the family business, the Trump Organization.) Collected and measured in her business dealings, the highly organized younger Trump was said to be a take-charge go-getter.
After marrying Jared Kushner, the son of another New York real estate scion in 2009, Trump grew to personify the accomplished, but dedicated working professional with a young family. Work-life balance was a recurring theme in her social media feeds, including her brand’s. Last year she penned her second book, “Women Who Work,” eight years after “The Trump Card: Playing to Win in Work and Life.” Whether in books, online or in person, Trump favored practical advice that women with or without children could put to use in their day-to-day lives.
Trump wasn’t living the brand — she was the brand. Even when she was no longer a part of the company, scores of followers and foes presumed she was. Her Instagram posts often included photos and clips of the first daughter on the go or at home with her three children Arabella, Joseph and Theodore. Four years ago, the brand launched the #WomenWhoWork campaign, an initiative that aimed to celebrate the various ways in which women work in all aspects of their lives. In a July 2015 interview, Trump told WWD, “Just like any business, it’s a lot of work. You need great people, a strong viewpoint and ambition. I’m never naïve to how much work something takes. But I sort of don’t know how to operate on a different speed, so that’s fine by me.”
Last year when Trump resigned from her company, she placed it in a trust. The founder also was said to have worked closely with the ethics counsel in order to adhere to OGE guidelines to avoid any potential conflicts of interest. Through her attorneys, Trump plans to continue to defend and protect the brand’s name against third parties. While it is not known, if or when Trump may return to the business world, whatever she may decide will not be affiliated with the Ivanka Trump Inc. brand, according to industry sources.
In the lead-up to the presidential election and in the 18 months since her father took office, Ivanka Trump has been bruised repeatedly by bad publicity. For key appearances during the 2016 Republican National Convention, the entrepreneur was criticized for wearing her apparel, footwear and accessories from her label that was simultaneously available to consumers. More damaging to her public persona, and brand, was an on-air plug by Trump adviser Kellyanne Conway during an appearance on “Fox & Friends” in March 2017. “Go buy Ivanka’s stuff is what I would tell you. I’m going to give a free commercial here. Go buy it today, everybody,” Conway told viewers.
Apparently, they took Conway’s advice. Klem noted shortly thereafter that the company saw its best performing weeks.
In March 2017, the White House argued that Conway’s public endorsement of Ivanka Trump’s brand was not intentional and that it was “highly unlikely” another such incident would occur. For formal occasions like this spring’s state dinner for French President Emanuel Macron, Trump favored American designer labels like Oscar de la Renta and Carolina Herrera.
In January 2017, Trump came under fire after posting on Instagram a photo of herself in a $5,000 Carolina Herrera silver gown, shortly after her father had commanded a zero-tolerance immigration and family-separation policy. Thousands lambasted the first daughter on social media for her apparent disconnect with current affairs. Many compared her evening attire to the silver mylar thermal blankets that displaced children were wrapped in at a U.S. Border Patrol station in McAllen, Tex.
In January of this year, the Democracy Forward Foundation, a nonprofit focused on legal and policy issues in the executive branch, sent a letter to the Office of Government Ethics demanding that the federal ethics agency discipline and open an investigation of the First Daughter and her alleged abuse of her White House position to promote her namesake brand.
There have also been lawsuits, including from a San Francisco fashion boutique owner, who claimed Trump’s increased profile gave her an unfair advantage, and more than one investigation by the Office of Government Ethics. That body, at the urging of some Democratic lawmakers and outside ethics watch groups, has looked into Trump’s involvement in her brand, despite the insistence from her representatives that she was in line with all ethical guidelines for White House members.
In late November 2016, hundreds of artists and supporters gathered outside Trump’s New York apartment with signs that read, “Dear Ivanka, Don’t Deport Our Families,” and “Putin? Really?” In April 2017, LGBTQ protesters converged outside Ivanka Trump’s house in Washington with a dance party for “climate justice.” In September 2017, other demonstrators returned to their address for a silent vigil in support of the Deferred Action on Childhood Arrivals program. And the hits kept coming. In November 2017, Aquazzurra Italia settled out of court with the Ivanka Trump brand after alleging the U.S. company ripped off one of its popular shoe designs. It dropped its allegations of trademark infringement after coming to an apparent agreement outside of the court with Trump and Marc Fisher Footwear, the company that produces shoes for the Ivanka Trump brand, according to a notice filed with a federal New York court.
Ivanka’s father, President Trump, has had similar hardships with an apparel line. Trump lost its contract with Macy’s Inc., which stopped carrying his signature collection over his inflammatory remarks on the campaign trail. The bad blood between Trump and Macy’s dates back to July 2015 when the retailer decided to stop carrying Trump’s merchandise, including his branded men’s wear and fragrance products, in all of its stores after he sparked a national outcry with demeaning comments about Mexican immigrants. PVH Corp., which signed a licensing agreement in 2004 to make shirts and neckwear for the Donald Trump brand, also said in July 2015 that it planned to stop producing the Trump products in the wake of the Macy’s announcement. In addition, Randa stopped making Trump’s small leather goods and Peerless Clothing ended its deal to make tailored clothing under the Trump brand.
Robert Passikoff, founder and president of Brand Keys, a brand loyalty and engagement research firm, said Ivanka Trump was a relatively small brand in the constellation of fashion brands prior to her father’s election. He noted that the brand “ended up getting tarred by both anti-Trump factions and inaction on the part of Ms. Trump herself.” He noted that chains, including Nordstrom, Burlington and Belk, stopped selling the line, and more recently Hudson’s Bay said Trump’s line would be phased out of all 90 stores by fall. Shoes, dresses, tops, bottoms, jewelry and all things Ivanka have been removed from HBC’s web site, Passikoff pointed out.
Boycotts in Canada have increased since President Trump’s behavior at the Group of Seven summit meetings in Quebec, where Trump refused to sign a joint statement with America’s allies, threatenedd to escalate his trade war and increase tariffs against Canada, and called Prime Minister Justin Trudeau “very dishonest and weak,” said Passikoff.
“The devastation to the Ivanka brand and the attendant consumer disengagement was more about Ms. Trump than her father,” said Passikoff. “The first daughter and senior adviser has remained quiet about virtually anything having to do with being first daughter or senior presidential adviser and that silence leeched into Ivanka the brand on the consumer side,” said Passikoff.
When President Trump targeted undocumented immigrants, boasted of abusing women, pulled out of the Paris climate accord and sought repeatedly to deprive working families access to the Affordable Care Act, or Obama Care, Ivanka Trump indirectly defended her father by saying nothing, according to Passikoff. She also said nothing when 2,000 minors were separated from their families by U.S. border agents, he added. “The minute she put herself in the spotlight, she was expected to do something and she didn’t do anything. You can’t say you’re a staunch supporter of women’s rights and not be vocal about what’s going on when you’re working for the government,” he said.
Tim Calkins, clinical professor of marketing at Northwestern University’s Kellogg School of Management, said, “I think there’s a couple of things that are really important. One is it’s very difficult to separate Ivanka Trump’s brand from Donald Trump’s brand. The challenge is it’s really Trump as a brand, and you get the good and the bad with it. Ivanka’s decision really reflects just how poor the Trump brand has become.”