Ivanka Trump fashion brand shutting down

Author: Irina Ivanova, Moneywatch
FILE – In a Thursday, July 19, 2018 file photo, Ivanka Trump, the daughter of President Donald Trump, applauds during a signing ceremony where President Donald Trump signed an Executive Order that establishes a National Council for the American Worker in the East Room of the White House, in Washington. Ivanka Trump’s clothing company is shutting down and all its employees are being laid off, according to news reports. The New York Post is reporting that its sources say the company “will be shuttered ‘ASAP’ and that staff have been informed that they’re being laid off.”(AP Photo/Andrew Harnik, File)

Ivanka Trump’s namesake fashion company is shutting down, citing challenges to growth.

The four-year-old company has faced headwinds since its founder, the eldest daughter of President Trump, formally stepped away from her role to become a senior White House adviser. It was an early target of the “GrabYourWallet” campaign to put pressure on the Trump brands as a way to weigh in on the president’s policies.

Shortly after the presidential inauguration, Nordstrom’s dropped the brand, citing poor sales. Hudson’s Bay dropped it from its Canada stores earlier this month.

A few months after Mr. Trump took office, Ivanka Trump told CBS News that she didn’t sell the company because of potential problems with its name. “[H]ad I sold the business, an independent third party would be able to go around the globe today licensing and leveraging the name of the 45th president of the United States of America — completely unfettered,” she said.

A spokesperson for the Ivanka Trump brand said the decision to close the company is not related to the brand’s performance. In a statement, she said the company was built on a growth model that was limited by Ivanka Trump’s resignation from the company. Its existing licensing contracts will be allowed to expire but will not be renewed, the person said.

“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,” Ivanka Trump said in a statement. “[M]aking this decision now is the only fair outcome for my team and partners.”

The company has 18 employees. It’s unclear whether they will be laid off.

The apparel company, which sells moderately priced women’s clothes, shoes, handbags and other accessories, has been a focus for critics of President Trump. Although Ms. Trump’s stake in the company was placed in a trust overseen by relatives, her identification with the brand drew fire for potential conflicts of interest.

The brand became a powerful proxy for consumers who feel otherwise powerless to affect the president’s policies, said Shannon Coulter, the organizer of the GrabYourWallet campaign.

“Many American women have been using their clout with retailers as a lever for expressing their deep dismay about the hate that the Trump administration represents,” said Coulter. “I think the Trump brand has become a lightning rod for bad publicity for the retailers that still carry it.”

The Democratic National Committee last week called Ms. Trump a “hypocrite” for the company manufacturing in low-wage countries like China while representing herself as a champion for working women.

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

In 2017, the company also attracted unwanted attention after an investigation by labor activists alleged abusive working conditions in a Chinese factory that manufactured its shoes.

Ivanka Trump Brand recently gained trademark approval from China for a range of items, including household and consumer products. Ethics watchdog groups noted the timing was problematic, coming on the heels of a dispute between President Trump and Chinese telecom giant ZTE, as well as the broader U.S. trade dispute with China.

Saunders noted that the brand’s copyrights and intellectual property would be retained, meaning a future relaunch is possible.

Most of Ms. Trump’s assets — worth at least $50 million — is held in a trust. Federal financial disclosure data show the trust generated over $5 million in revenue last year, according to The Associated Press.

— The Associated Press contributed to this report

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