Why Ivanka Trump Is Really Shutting Down Her Fashion Brand, Plus How Much Money She Made from Her Company Last Year
Ivanka Trump is shuttering her namesake fashion brand. The first daughter announced the closure of her company, which she founded in 2014, on July 24, saying that she plans to focus on her work in Washington, D.C.
“After 17 months in Washington, I do not know when or if I will ever return to the business,” Trump said in a statement, “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.” Trump stepped away from an active role in the business in 2017.
“This decision has nothing to do with the performance of the brand and is based solely on Ivanka’s decision to remain in Washington indefinitely,” the company said in a statement. “Strict limitations on the business” that were put in place because of government ethics rules were also a factor, the company said, as they “limited the brand’s ability to grow – both domestically and abroad.”
Were poor sales to blame?
The company said that disappointing performance was not the reason behind the label’s closure. However, the Ivanka Trump brand was the subject of the #GrabYourWallet boycott in 2017, and several major chains, including Nordstrom and Neiman Marcus have stopped selling the brand. In July 2018, Canadian department store chain Hudson’s Bay said it would phase out Ivanka Trump products based on “brand performance.”
During her father’s presidential campaign, sales increased for Trump’s clothing line, according to the Wall Street Journal. But the boycott and negative publicity took a toll, including controversies such as when White House advisor Kellyanne Conway urged people to “go buy Ivanka’s stuff.” Online sales fell close to 45% over the past 12 months at stores like Amazon, Macy’s, Bloomingdale’s, and Zappos, the Journal reported.
Trump also had a line of fine jewelry that she discontinued in March 2017.
Conflicts of interest also played a role
Since Trump took up a role in the Trump administration, watchdog organizations have warned that her attempt to run a business while also working for the government could cause a conflict of interest. Though Trump took steps to separate herself from her company’s day-to-day operations, she was still involved in major decisions, such as striking overseas deals and approving new licensing partnerships, the New York Times reported.
“She reportedly realized that there were too many potential conflicts of interest to avoid, something many observers warned about from the beginning,” Noah Bookbinder, the executive director of Citizens for Responsibility and Ethics, said in a statement. “The many ethics issues arising from her business were not limited to Ivanka Trump herself — Kellyanne Conway was reprimanded for doing a ‘free commercial’ for the brand from the White House.”
Here’s how much Ivanka made from her business last year
Trump earned at least $82 million in 2017, according to financial disclosures. At least $5 million of that came from assets in a trust that includes her fashion business. She and her husband Jared Kushner also have millions of dollars of assets in real estate and other business ventures and investments.
The disclosure forms also revealed that Trump and Kushner are millions of dollars in debt. Kushner opened three lines of credit shortly after joining the White House in 2017, with his reported debt ranging from $31 million to $155 million, which might be linked to his family’s real estate business. The couple also owed between $50,001 and $100,000 on a Visa card.
How many people will lose their jobs?
For such a high-profile company, Ivanka Trump’s clothing brand had relatively few employees. Eighteen people will be affected by the company’s closure, according to the Wall Street Journal.
Trump has backed her father’s initiatives to increase American jobs, tweeting just last week in support of efforts “to fill vacant American jobs with American workers.” However, critics were quick to point out that all of her brand’s clothing is manufactured overseas in countries like Vietnam, Bangladesh, and Indonesia. Workers at a Chinese factory where a licensee manufactured apparel for the brand earned $62 a week, according to a 2017 report.