The daughter of the world’s most powerful politician has decided to shut down her fashion line. That story could well be a case study in the destruction of brand value.
The official reason Ivanka Trump, first daughter and senior White House advisor, has offered for this closure is to focus “for the foreseeable future” on work she is doing in Washington.
What work? Public policy is the vague answer but nobody knows for sure. In his 18 months in power, her father does not appear to have valued her counsel on climate change, healthcare, women’s rights or LGBT issues. Her faux feminist proposal to offer women a childcare tax break sank without trace. Her more recent attempt to revive her relevance was to promote her father’s infrastructure plan that many considered dead in the water long ago. She and her husband Jared Kushner, whose security clearance was downgraded to the level of White House kitchen staff, have been mostly off the grid these past six months.
The real interconnected reasons for this abrupt decision are Ms Trump’s frustration for the heightened level of scrutiny of her business practices and dwindling sales. This is a humbling moment indeed, from the time when sales soared after Donald Trump won the election.
Ms Trump’s business practices were already subjected to sharp criticism during the campaign, especially when her staff urged consumers to “shop the look” when she appeared in one of her trademark sheath dresses and overpriced jewellery at the Republican National Convention.
But her 11-year-old business has gone steadily downhill since her father’s accession to 1600 Pensylvania Avenue. Soon after, activists held protests to boycott her products, and signature retailer Nordstrom dropped her line citing poor sales. Nor did the controversy end there. In January 2017, she put the business in a trust and handed over day-to-day operations to a professional but controversially remained involved in strategy.
Later that year came revelations of sourcing from Chinese suppliers who followed dodgy labour practices. And of course, the criticism on her “modelling” her products at official appearances — including on a visit to India — endured. Then came her singularly tactless tweet of a chiaroscuro photo showing her embracing one of her children, just when her father’s policies were forcibly separating illegal immigrants from their children at the border.
It is hard to pinpoint the precise reason for the decline of Ms Trump’s brand: Her own manifest amorality, her father’s coarse and destructive presidency or the poor USP of her products. Given that the segment in which Ms Trump’s product sold depended on its branding rather than price or product differentiation, it is difficult to escape the notion that the first two were major factors in the failure of her business.
Over the past 18 months other big name retailers such as Neiman Marcus Group and T J Maxx sharply scaled back on stocking her products, as did a Canadian retail Hudson’s Bay. And the Wall Street Journal reported that online sales of her brand fell nearly 55 per cent in the 12 months to June.
The decline and fall of Brand Ivanka points to an evolution of consumerism in America from which India’s consumers could learn.
In evolved markets, brand values, or the premium consumers are willing to pay for a brand, are closely linked to reputation, which is why corporations pay top dollar for PR and image consultants. This partly explains why several labels publicly declined to dress Melania Trump for fear their brands would come to be associated with her husband’s obnoxious politics (by its nature, the fashion business hews towards liberal politics). As a result, her fashion consultant reportedly buys her clothes anonymously. When the first lady appeared in a Michael Kors outfit, the designer of Swedish-Jewish origin was at pains to explain that she bought it off the rack and at the sticker price.
In India, very much the emerging consumer market still, brand values remain linked to tangible deliverables such as price and performance. At one level, this means that companies cannot rely solely on their reputations to sell products if they do not meet these two criteria — the failure of the Tata Nano being a case in point. But it also means that corporations that can deliver these attributes through, say, blatant dishonesty or by suborning policy can flourish with impunity.
During his February visit realtor Donald Trump Jr, executive director of Trump Organization, observed that the "spirit" of doing business in India is much more aligned with the US way of doing business.
If his father’s business practices are the yardstick, this is a depressing observation indeed.