Melania Trump and Ivanka Trump sit with Jared Kushner at an event. (Photographer: Patrick T. Fallon/Bloomberg)

Ivanka Trump’s Clothing Line to Shut Down

(Bloomberg) -- Ivanka Trump, the president’s daughter, is pulling the plug on Ivanka Trump, the purveyor of womens’ fashion.

After a year and a half of sporadic controversy over potential conflicts of interest, Trump, a White House adviser, said Tuesday that she would wind down the company. She made the decision after some big-name department stores dropped her brand, but said in an emailed statement that she did it as a mercy to her employees.

“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,” Trump said in an emailed statement.

The brand depended on Ivanka Trump as a symbol of aspiration and possibility, selling dresses, shoes and accessories meant to signal confidence without pushing fashion’s envelope. But politics brought scrutiny. Most of her products were made overseas even as Donald Trump decried outsourcing and threw up tariffs meant to keep jobs at home. China granted the company trademarks, bringing accusations of favoritism and emoluments. In the end, the company will join a long list of defunct Trump enterprises, including casinos, magazines, steaks and ill-fated Trump University.

“I don’t think it’s a surprise to anyone,” said Gabriella Santaniello, founder of retail consultancy A Line Partners. “Her wholesale business has been contracting for well over a year now. You need retailers to have a wholesale business, and given how it’s been received by the public, a lot of retailers don’t want to wade in politics.”

Trump launched her fine jewelry brand in 2007, adding footwear in 2010 and handbags the following year. The company expanded into apparel in 2013 and outerwear, eyewear and fragrances one year later. By 2016, there was denim, activewear, fashion jewelry and even baby bedding, a company spokeswoman said. Much was made by Marc Fisher Footwear and G-III Apparel Group Ltd., which also makes clothes under the Donna Karan and Karl Lagerfeld brands.

Washington Bound

In March 2017, Trump was named an adviser to her father, taking no salary and leaving the business in the hands of a caretaker. According to her public Facebook page, she focuses on “job creation, economic empowerment, workforce development and entrepreneurship.”

Her role hasn’t been clearly defined, although she’s expressed interest in family leave and was prominent in discussions about the tax system. She attended the W-20 women’s summit in April 2017 and led a U.S. delegation to India in support of women’s entrepreneurship.

As her identification with the administration grew, her business waned. T.J. Maxx last year told employees to eliminate Ivanka Trump signs in its stores. Some retailers pulled merchandise from their websites while continuing to sell them in stores, downplaying the brand while avoiding the ire of activists and labor rights groups that said Chinese workers that made the goods were underpaid and underprotected.

Trump Backlash

When Nordstrom Inc. in February 2017 said it would stop selling her merchandise, Donald Trump said on his personal Twitter account that his daughter was being treated unfairly. This month, Hudson’s Bay Co. said that it would stop selling the goods at its Canadian namesake stores, citing slow sales.

After the breakup with Nordstrom, Ivanka Trump’s brand began to target shoppers directly. In late 2017, it started to sell handbags on its website and opened a small accessories store in the lobby of New York’s Trump Tower. This year, it began to allow shoppers to order apparel from a website.

Executives insisted the Ivanka Trump brand was performing better than ever in the weeks following the Nordstrom saga, thanks to the media frenzy. Trump valued her business at over $50 million in a recent public financial disclosure filing.

In recent years, management moved the brand downmarket. Once aimed at wealthy women, the label began exuding a more modest image as a celebrity brand, rather than a house of fancy fashion. In 2017, the brand closed its fine jewelry business, trading its glitzy diamond necklaces for $30 bangles and earrings.

“Retail is about mass, it was a mass market brand. They don’t want any controversy,” Bob Phibbs, chief executive officer of New-York based consulting firm the Retail Doctor, said in a phone interview. “Great retail brands are making the world more inclusive. They can’t afford to be polarizing people.”

As the business winds down, the brand’s partners will continue to produce and sell products through the end of existing licensing agreements.

Unsolvable Problem

The Ivanka Trump brand tried to boost sales overseas, where it had struggled to find customers. The same day her brand won approval for three new trademarks in China, Ivanka Trump was seated next to Chinese President Xi Jinping at a dinner.

Norman Eisen, a fellow at the Brookings Institution in Washington and a former adviser to President Barack Obama, said closing down the business can’t remove the ethical taint.

“She still maintains other business ties such as her trademarks,” he said in an interview. “And it’s just as likely the reason for this is that people have pivoted away from her brand.”

“I would have welcomed this decision if it came 18 months ago but at this point it’s difficult to be too enthusiastic. As usual with the Trumps, there is much less than meets the eye.”

In the end, the company couldn’t escape the fundamental question posed to Ivanka Trump last year at a panel of women entrepreneurs: “What is your role, and who are you representing, your father as president of the United States, the American people, or your business?”

©2018 Bloomberg L.P.