Dead Brand Walking: How Ivanka Trump Set The Table For Underperformance

The Intertubes are ablaze with Trump news, though not all of it centers around the latest antics of the President. Much of the big buzz is over Trump's daughter, Ivanka, who saw her eponymous fashion line targeted for boycott when last year's campaign season began heating up. The situation grew from bad to worse after Election Day and in the latest development, top retailer Nordstrom let slip that it would no longer carry the Ivanka line.

Nordstrom cited underperformance, and it is just the latest in a growing number of retailers that dropped Ivanka for the same reason. The question is: Was the boycott effective, or has the Ivanka line simply lost touch with its customers?

Vogue hints at looming Ivanka Trump disaster

For an answer, it's instructive to look back at a long-form profile of Ivanka Trump that appeared in Vogue magazine almost exactly two years ago, on Feb. 15, 2015.

In typical puff-piece style, the article is padded with gushy asides about the ability of then 33-year-old Ivanka to meld motherhood, matrimonial romance, religious affiliation and business savvy into one powerful brand aimed straight at the millennial market:

". . . It’s less than two weeks into 2015, and while most of us are still coming out of a holiday fog, Ivanka has already launched a thousand ships," the article reads.

The Vogue piece emphasizes that Ms. Trump launched her brand with successful millennial women in mind. Specifically, that would be fashion-forward careerists who can pull off edgier, pricier looks than those dictated by the working woman's triumvirate of Anne Klein, Anne Taylor and H&M.

Here's the money quote from Ms. Trump herself, as cited by Vogue:

". . . It’s so funny seeing the way our competitors think women dress," Trump told Vogue. "Me and my peers, we’re working really hard at being moms and sisters and professionals. There was a previous generation of women who rose through the ranks in an environment when work and life were highly compartmentalized. And I think now, because of technology, we’re always on. Where there used to be work life and home life, now it’s one life. And I think a lot of companies don’t recognize that."

Do read the full piece to get a vivid picture of just how high Ms. Trump was flying two years ago. For those of you on the go, here's another snippet:

"Last fall, she quietly launched ivankatrump.com, a site geared to the young professional woman — 'the everyday version of Ivanka,' as someone on her team puts it—the same woman, presumably, who is buying all those Ivanka Trump shoes at Nordstrom, at the moment her biggest retail partner.

[snip]

". . . One of the reasons she decided to launch a brand in her own image is that The Apprentice made her famous: a 20-something real estate diva. As she herself points out, 'Young professionals don’t usually have pop-culture relevance.' She started getting piles of fan mail from girls who wanted to grow up to be just like her."

The higher they go, the farther they fall

Fast forward two years, and the Ivanka brand is in free-fall. The latest move from Nordstrom provoked a Twitter outburst against the department store chain from the president himself that appeared unseemly if not illegal.

If the intent was to punish Nordstrom, it failed miserably. Here's the lowdown from Bloomberg:

"Nordstrom Inc. not only withstood Wednesday’s negative tweet from President Donald Trump, but it’s also added almost $450 million of market value. The department-store chain is on pace for its biggest two-day gain since early December. The shares quickly recovered from a brief slump immediately after Trump slammed Nordstrom on Twitter for dropping his daughter Ivanka’s brand."

Presidential advisor Kellyanne Conway was apparently tasked with defending the Ivanka brand. During a televised interview, she urged shoppers to "buy Ivanka's stuff" and now faces serious ethics charges for using her position to promote a private company.

So, what about the boycott?

Ms. Trump's troubles could be traced as far back as the summer of 2015. Just a few months after she launched Ivanka, her father embarked on a primary campaign punctuated by anti-Muslim and anti-Mexican remarks, among other divisive rhetoric.

As the campaign season heated up, activists began calling for a boycott of the Ivanka brand.

While it's tempting to credit the boycott with the failure of the label, that may not necessarily be the case. For example, Fortune magazine offers a research-based take on the impact of boycotts in general:

"As research has shown, boycotts typically do little to hurt companies’ revenues, in part because the activists are not typical consumers of their target companies’ goods . . . In addition, consumers tend to be fickle and unwilling to part from their favorite products and services to support a boycott, even when they are ideologically aligned with its goals."

On the other hand, the research cited by Fortune (from Professor Brayden King of the Kellogg School of Management at Northwestern University) makes it clear that a company that is vulnerable to begin with could experience a significant impact:

". . . Companies that have experienced a decline in public reputation are more susceptible to boycotts, and that the more media attention a boycott receives, the greater its effectiveness will be."

The Ivanka brand certainly fits that bill. Due to the closeness of the relationship -- familial, business and governmental -- between Ms. Trump and her father, she is forced to absorb the ripple effect of the negative press her father receives.

The Braydon King research also cites media attention, and in that regard the actions of Ms. Trump's father and his advisor certainly stoked the media fires. The unforced error was compounded when Nordstrom did the unexpected and issued a strong response to the Trump tweet:

"To reiterate what we've already shared when asked, we made this decision based on performance. Over the past year, and particularly in the last half of 2016, sales of the brand have steadily declined to the point where it didn't make good business sense for us to continue with the line for now . . ."

The Ivanka brand is also vulnerable to boycotts because its target customers -- executive and aspirational working women -- are deeply affected by the policies of the Trump administration. As amply demonstrated by the Women's March on Washington and many other actions before and after Election Day, the "typical consumers" of the Ivanka brand have become activists.

More troubles for Ivanka

TriplePundit has noted other issues with the Ivanka brand that also generated negative attention, leading to increased vulnerability to boycott.

One significant problem that surfaced last year was the brand's policy of not paying interns. Unpaid internships are common but not universal, and the optics were way off for a brand focused on working women.

The Ivanka brand also created a "family embarrassment" by hawking a bracelet Ms. Trump wore during a televised interview shortly after Election Day.

Regardless of whether or not the boycott has made a significant difference, the association with the Trump administration has not done the Ivanka brand any favors. Business Insider offers up an annotated list of other retailers that have dropped or curtailed their ties with Ivanka, and it seems to be growing.

So far the list includes Nordstrom, Neiman Marcus, Shoes.com, Belk, Jet, ShopStyle and Gilt.

It's worth noting that, according to Business Insider, one of those -- the Canada-based online retailer Shoes.com -- at least temporarily cited the boycott as an explanation:

"We understand and your voices have been heard," the company said in a tweet, which was later deleted. "We have removed the products from our website."

Shoes.com told Fast Company that the shoes weren't selling well.

T.J. Maxx and Marshalls also recently let slip that they would no longer promote their Ivanka stock.

Image credit: by Michael Vadon via flickr.com, creative commons license.