Crisis Management: Lessons Learned From The Ivanka Trump Brand

Ivanka Trump's eponymous fashion brand has drifted far down from its original moorings in the luxury category, and the presidency of her father, Donald J. Trump, is not helping matters. Her brand is connected to his both through family ties and through her twin roles as a trusted advisor to the President and wife of Jared Kushner, a senior advisor and point man for White House policy. The result is a negative feedback loop that amplifies bad news and threatens to bring down the entire Ivanka brand.

Even a seasoned crisis management team would have difficulty steering the Ivanka Trump brand through rough seas, so it's instructive to take a look at the series of crises it has faced since President Trump assumed office.

Ivanka Trump and Make America Great Again

One persistent thread of the Ivanka brand story is the collision between its manufacturing model and President Trump's central message. Throughout his candidacy and into his presidency, Trump appealed to voters by promising to bring factory jobs back to the U.S. and "make America great again."

The campaign strategy included taking frequent pokes at China, and that rhetoric continued beyond Inauguration Day. Here's a representative snippet from an exclusive interview reported by Reuters in February:

"Well they, I think they're grand champions at manipulation of currency. So I haven't held back," Trump said. "We'll see what happens."

During his presidential campaign Trump frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, "stealing" American manufacturing jobs.

That message put the media spotlight on the Ivanka brand, which relies heavily on factories in China to produce its wares. And, Ivanka Trump (the brand) has not failed to deliver the news to a hungry media pool.

In the latest development, earlier this week Time Magazine ran a bombshell story about the disappearance of three labor activists with the group China Labor Watch. According to the report, the group has been uncovering labor abuses for 20 years and only began encountering an extreme "level of scrutiny" when investigating a manufacturer of Ivanka Trump branded merchandise.

Ivanka was not the only brand involved. The investigators found orders for other brands at that same factory including popular ones like Nine West and Easy Spirit. Furthermore, the manufacturer (the Huajian Group) claims that Ivanka is a small fraction of its shoe business.

Nevertheless, the story focused almost exclusively on Ivanka. Time went with this headline:

The Men Investigating Ivanka Trump's Shoe Producer in China Are Missing or Arrested

With his emphasis on bringing factory jobs back to the U.S., President Trump has also brought negative attention to the Ivanka brand. Overseas manufacturing is commonplace and not newsworthy for other brands, but in light of the President's "MAGA" slogan it makes for juicy headlines.

In March, for example, Agence France-Presse reported that almost 60 tons of Ivanka items from overseas manufacturers were headed to U.S. ports from overseas even as Inauguration Day for the President-elect approached.

That headline was:

Ivanka Trump is exception to dad's 'Buy American' rule

The sensational disappearance or detention of three labor rights activists in China is also not the first time that the Ivanka brand has been linked to labor abuses in that country.

Last fall, investigators tracked overtime abuses at G-III, which licenses Ivanka fashion items among other brands. The Washington Post revived the story in April. Even though G-III manufactures other well-known U.S. brands, only Ivanka appeared in the headline:

Workers endured long hours, low pay at Chinese factory used by Ivanka Trump’s clothing-maker

But everybody else does it!

The Ivanka brand is such a big target that it suffers from negative publicity even when following relatively common practices in the fashion industry.

One such practice, for example, is re-labeling items from one brand to another. Although not as common in recent years, re-labeling has long been an accepted practice in the fashion industry. Among other uses, relabeling enables up-market brands to sell clothing at down-market retailers without tarnishing the brand's image.

In terms of sustainability, re-labeling is actually a good thing, as it provides a second chance at sale for new items that might otherwise be pulped.

Nevertheless, when G-III relabeled Ivanka items it made news all over the Internet.

Business of Fashion broke the story under this headline:

Amidst Backlash, Ivanka Trump Clothing Is Secretly Relabelled as Adrienne Vittadini

Ivanka Trump and the "silent" boycott

As a candidate, President Trump was instrumental in motivating the high profile #grabyourwallet boycott campaign, which encourages shoppers to boycott retailers that carry Trump items -- either Ivanka or her father's Trump brand.

The campaign has been successful, judging by the number of retailers dropping Trump items since the boycott began (the #grabyour wallet website provides a list of those companies, as well as a separate list of companies still carrying Trump items).

The Ivanka brand has been pushing back against the boycott by claiming that it has had no effect on sales. That seems to be borne out by filings submitted by G-III for 2016, but the jury is still out on 2017.

Meanwhile, there is ample evidence that the Ivanka brand has experienced a long term slide away from its original high-end aspirations.

That's not due to any organized anti-Ivanka campaign on the part of high-end shoppers. Instead, it's a "silent" boycott. The target customer simply is not interested in the product.

Last week, Bloomberg provided a long form rundown of the brand's slide under this headline:

Rich People Don’t Want Ivanka Trump’s Fashion

Ouch! Do read the article for a detailed account of the transformation. For those of you on the go, the first paragraph summarizes:

At its heart, Ivanka Trump is a celebrity brand, not a designer fashion house, industry analysts say. It’s the messy discount rack, not the gleaming glass jewelry case...

Brand re-positioning isn't necessarily a bad thing. After all, the Bloomberg article concludes that so far, "targeting the masses" has enabled the Ivanka Trump brand to stay afloat.

Nevertheless, with its biting headline, the Bloomberg article cuts deeper, defining the brand as an increasingly hollow promise -- a tacky effort to imitate high end fashion rather defining and celebrating its own style.

What next for Ivanka Trump?

The Ivanka Trump brand's success in winning trademarks in China indicates that heading into Inauguration Day, the company expected to ride on the coattails of an at least moderately successful Trump Administration.

That may be strengthening the Ivanka Trump name in China, but here in the U.S. the brand seems to be caught completely off-guard by the series of negative stories swarming over it, offering little or no comment -- and no discernible action -- with each wave of bad news.

Those waves have been magnified by the spiraling scandals in the Trump Administration, compounded by the inability of President Trump to iron out disagreements within his own party to advance the Republican legislative agenda.

Polling is beginning to indicate that even the President's solid base is crumbling.

Without a successful (in other words, popular) Trump Administration as a lifeline, it's well past time for the Ivanka Trump brand to roll up its sleeves and engage in some serious crisis management.

It's a formidable task, but the path could be eased somewhat if Ivanka Trump (the person) asserted some authority in the White House as a trusted advisor and self-styled champion of working women.

So far, though, the strategy seems to consist of battening down the hatches and riding out the storm.

Meanwhile, Ivanka Trump -- the brand and the person -- have little more to offer than champagne ice pops.

Image (screenshot): via Twitter.

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