Ivanka Trump’s embattled fashion brand is shutting down

Senior Writer
Yahoo Finance

After four years in operation, Ivanka Trump’s namesake brand is shutting down.

Trump officially stepped away from the company in January 2017 to take on the role of a senior adviser to the White House. Abigail Klem, the company’s chief brand officer, became president.

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The company is letting its licensing deals, including a global one with G-III Apparel Group (GIII), expire this month. Trump claims that her work in Washington and rumblings about potential conflicts of interest are hindering the growth of the company.

“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 said in a statement.

After seeing a bump up in sales during the 2016 presidential election, retailers have been distancing themselves from the brand, making it difficult for many shoppers to even find her items in stores.

Retailers ditching the brand

Last February, retailers Neiman Marcus and Nordstrom (JWN) dropped Trump’s clothing from their stores. Since then, Hudson’s Bay stores in Canada and DSW (DSW) have also ditched the line. T.J. Maxx and Marshalls, both owned by TJX Companies (TJX), still carry the brand, but employees were told not to display or market the items prominently.

Online sales of Ivanka Trump’s items on Amazon.com, Macy’s Inc., Bloomingdale’s and Zappos.com fell nearly 45% over the last year, compared with the year-earlier period, according to Rakuten Intelligence, the Wall Street Journal reported.

Grassroots movements like #GrabYourWallet — a campaign that targets retailers that sell Trump products — have certainly accelerated the push to ditch Ivanka Trump apparel and accessories.

Views on the brand have become highly polarized and it has become a lightning rod for protests and boycotts. While the company is still viable, doing business has become far more challenging and these problems will only increase,” said Neil Saunders, managing director of GlobalData Retail.

Ivanka Trump’s fashion brand opened a new retail store in the lobby of Trump Tower in December. (Photo by Drew Angerer/Getty Images)
Ivanka Trump’s fashion brand opened a new retail store in the lobby of Trump Tower in December. (Photo by Drew Angerer/Getty Images)

While the polarizing Trump name undeniably had a dampening effect on sales, it isn’t the only reason for the brand’s demise. Trump’s line is best known for its pastel and floral sheath dresses and pearl earrings. Her clothes were never a “destination” category, according to Jan Rogers Kniffen, a former retail executive and the current CEO of J Rogers Kniffen WWE, a firm that consults investors in retail companies.

Retail analyst Hitha Herzog believes there’s a more straightforward explanation.

“G-III had mentioned that the Ivanka Trump deal was for her name for apparel, accessories and shoes. This was just a licensing deal expiring and they decided not to renew rather than finding another company to do another deal,” she said. “We saw it coming, I’m not that surprised. But this happens with brands — the licensing deal ran out.”

Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Read more from Melody here & follow her on Twitter @melodyhahm.

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