How a Solid CSR Program Could Save the Ivanka Trump Brand

First daughter Ivanka Trump's eponymous fashion brand has had a rough week. First came word that the brand's manufacturer is re-labeling her clothing and funneling it off to a discount retailer. Then, news broke that the same manufacturer has a record of underpaying its factory floor employees, with a grinding 57-hour work week among other violations of United Nations labor standards.

That's a bad look, especially because the face of the company is a self-styled champion for working women.

Standard crisis management calls for the Ivanka brand to admit the mistakes and position them as isolated incidents. That's not an easy task for a company that is already burdened with ethical questions.

So, what comes next?

When is a brand not a brand?

The first issue erupted into the public sphere when Business of Fashion reported that the Ivanka Trump clothing has been selling at the discount retail chain Stein Mart under the Adrienne Vittadini Studio label.

Label-switching is legal, as BoF reports, yet the practice has been fairly commonplace in the past. But it has fallen out of favor in recent years as retailers and manufacturers find other options to sell discounted items. The growth of the political boycott movement has also motivated consumers to dig behind labels for more information about their purchases.

Business of Fashion obtained a statement from G-III, "the company that licenses Ivanka Trump ready-to-wear," emphasizing that the company acted without the knowledge or consent of the Ivanka brand. The G-III statement further defended the Ivanka brand while deflecting blame from itself, by characterizing the clothing as "mistakenly labeled" rather than a purposeful attempt to deceive consumers.

That should have put an end to the issue, but G-III took an additional step, claiming the "Ivanka Trump brand continues to grow and remains very strong.”

That gave BoF an opening to explore whether or not the switch really was accidental. Reporter Lauren Sherman makes the case that a consumer boycott could be the root cause:

"Since the election of her father Donald J. Trump to the office of U.S. president, Ivanka Trump-branded merchandise has been dropped from several prominent American retailers, most notably Nordstrom — which cited weak sales — as well as Neiman Marcus and Shoebuy.com. According to a source within Stein Mart, the retailer has received negative feedback from customers regarding Ivanka Trump product, with one customer spitting on a blouse in front of a cashier before storming out of a store."

Despite G-III's disavowals, the label-switching incident adds more ammunition to the boycott campaign against the Ivanka brand by networks such as #GrabYourWallet.

Do read the article for full details (here's that link again). In another odd wrinkle, as of this writing the Adrienne Vittadini brand has not confirmed whether or not it was aware of the switch.

Ivanka Trump talks up working women, but...

The second newsworthy issue of the week surfaced in a Washington Post article about factory conditions at G-III. The timing of the article is interesting because it describes an audit that took place all the way back in October, in the run-up to Election Day. The inspection was conducted by the third-party group SMT-Global.

Here's the takeaway from the Post:

"Workers at the G-III factory in China were required to work 57 hours a week “on a regular basis” to hit production targets, inspectors found. Though Chinese law sets the limit for overtime at 36 hours per month, workers in all of the factory’s departments exceeded that limit, working up to 82 hours of overtime a month between September 2015 and August 2016.

"The factory’s workers made between 1,879 and 2,088 yuan a month, or roughly $255 to $283, which would be below minimum wage in some parts of China."

The Post lists two dozen violations in all, including workplace safety issues and failure to cover more than two-thirds of the workers under a benefit program mandated by the Chinese government. It also appears that the factory provided only a few workers with the number of days off to which they were entitled. Most received five days off yearly.

The news came at a particularly bad time for Ivanka Trump -- the person, not the brand. It undercuts the women's empowerment theme of her new book, which was just published under the title "Women Who Work: Rewriting the Rules of Success."

"Women Who Work" met with a media backlash that raised conflict-of-interest issues in consideration of Trump's official capacity in the administration of her father, President Donald Trump.

In an attempt to defuse the issue, last week Ivanka Trump cancelled a planned promotional tour and pledged to donate all proceeds from the book to charity.

That crisis was beginning to fade from the media spotlight, but Drew Harwell of the Post focused new attention on the disconnect between Trump's social messaging as first daughter and her practices as a businesswoman.

Making the situation even worse, on April 25 Ivanka Trump participated in the W20 Forum in Berlin to showcase her views on women's issues, only to receive a chorus of boos and hisses from the audience when she defended her father's record.

Trump vs. Trump

Speaking of President Trump, all of this bad publicity comes at a bad time for him as well. The president has his staff working overtime on pitching his first 100 days in office as productive in terms of fulfilling his campaign promises.

Though Trump now characterizes the first 100 days as an arbitrary media exercise, he made that time period a feature of his presidential campaign.

During the campaign season Trump assembled a long list of pledges in the form of Donald Trump's Contract with the American Voter." The so-named contract details Trump's "100-day action plan" that begins on the first day of his term in office. (If the campaign website is no longer available, you can find the contract in the Google Wayback Machine archives.)

Unfortunately, as the 100-day period draws to a close on Saturday, the pickings appear to be slim on the productivity side.

Meanwhile, the Michael Flynn scandal is heating up to the boiling point, pressure is rising for a thorough investigation of Russian influence on the Trump campaign, and a third executive order targeted at immigrants has just been swatted down by the courts. (The first two were iterations of the notorious "Muslim travel ban," and the third was an attempt to punish sanctuary cities.)

In addition, Trump's own staff has forced him to downgrade the role of top advisor Steve Bannon. Adding insult to injury, news reports indicate that Bannon has been less than forthcoming about his success in the private sector prior to joining the White House staff.

The last thing that President Trump needs is another headache, but the spotlight on his daughter has intensified at exactly the wrong time.

In addition to the new controversies this week, the brand's overseas licensing deals and patents have also raised ongoing conflict-of-interest concerns. And the Ivanka brand's continued reliance on overseas manufacturing may pull the rug out from under President Trump's much-publicized "Buy American" message.

The CSR redemption: The wrong way

The Ivanka Trump brand is facing some choppy seas, pushed along by boycott campaigns like #GrabYourWallet and Sleeping Giants. It could be in for the same kind of perfect storm of negative publicity that forced Fox News to boot its popular pundit Bill O'Reilly off the air.

It seems that Ivanka Trump (the person) has recognized the danger.

In an apparent attempt to build her credibility -- and consequently reflect some positive news on the president -- on April 26 Ivanka Trump told an Associated Press reporter that she would help launch an economic development fund for women under the umbrella of the World Bank.

"Ivanka Trump told me yesterday from Berlin that she has begun building a massive fund that will benefit female entrepreneurs around the globe," wrote Michael Sohn of the AP. "Both countries and companies will contribute to create a pool of capital to economically empower women."

Unfortunately for both of the Trumps, her description of the initiative has raised a whole new round of ethics questions involving the use of White House authority -- or arm twisting, as the case may be -- to solicit private funds for the endeavor.

That may all be sorted out eventually, but the damage has already been done. Investors who would like to establish good relations with the White House have been put on notice that they can show their goodwill by contributing to the new fund.

CSR the right way

Ivanka Trump (the person) would be better served by putting her brand on a conventional CSR track. It takes years of hard work, but setting goals and seeing them through have provided top companies like Levi-Strauss and Starbucks with the trust and credibility needed to weather bad publicity.

There is no need to re-invent the wheel. The CSR movement has been gathering steam since the early 2000s, and there are plenty of best-practice models and other instructive resources at hand.

The Ivanka brand could start by looking at a model very close at hand -- right in the White House, in fact.

Her father's reported affection for Coke is drawing new attention to the Coca-Cola Co., which is deeply involved in the CSR movement.

Though critics raise important issues with the company's purveyance of sugary drinks, it has a growing CSR track record that includes everything from a newly expanded paid family leave policy to bio-based bottles. Coca-Cola's CSR program also follows science-based principles for reducing greenhouse gas emissions, and its water conservation initiatives have set a high bar.

On the other hand, in keeping with the spirit of CSR, Coca-Cola was among several companies that used the Super Bowl platform to push back against President-to-be Trump's campaign rhetoric. And it was one of the first companies to come out swinging against Trump's first "Muslim ban" executive order.

If not Coca-Cola, then Ivanka Trump (the person) has plenty of other examples at hand.

Image credit: Disney | ABC Television Group via Flickr