Ivanka Trump: A Study in Brand & Celebrity
Ivanka Trump (Kushner) is a businesswoman with an international portfolio of brands including a fine jewelry line and fashion/lifestyle products. She’s also the 35-year-old daughter of US President Donald Trump, and is serving as the Special Assistant to the President in his administration.
Much has been made of President Trump’s conflicts of interest and the decision to place his assets in a trust and turn over control of the Trump organization to his sons, rather than divest his extensive holdings. Potential ethical challenges remain, however, in an environment where the public interest meets personal business interests. And Ivanka is no exception.
Mrs. Trump’s visibility as First Daughter has exacerbated a long-standing problem with celebrity, namely that among their many fans are those ready to infringe on and profit from a star’s brand. This is epitomized by Ivanka’s popularity in China which has soared in recent months to nearly cult status. Such adoration comes at a price. In this case, the price includes the cost to monitor and defend her name against an array of Chinese trademark applications for products like mattresses, formula milk powder, wallpaper and alcohol. The Associated Press reported on 18-Apr-17 that Ivanka Trump Marks LLC has 16 registered trademarks in China and 32 pending applications, along with a total of four marks granted preliminary approval since the inauguration, according to China's Trademark Office. Those same Chinese trademarks have prompted concerns that the daughter of the President may be courted by foreign powers and businesses to curry favor with her father.
Americans haven’t been nearly so adoring in the current hyper-political environment. Buyer activism has increasingly seen consumers use their wallets to express opposition to Donald Trump’s policies as President, leaving retailers to navigate a market fraught with contention. Ms. Trump’s position in the current administration further complicates management of her brand. Case in point, the uproar following the President’s tweet critical of Nordstrom for dropping Ivanka’s clothing line and calls for censure resulting from the widely-reported endorsement of Ivanka Trump’s products by Kellyanne Conway on Fox & Friends which ran afoul of governmental rules preventing the use of a public office for private gain.
In this political landscape, any perceived misstep can result in repercussions from brand degradation to legal action. On 16-Mar-17 Ivanka Trump Marks LLC was named as the defendant in a class action lawsuit for unfair competition. The suit was filed by Modern Appealing Clothing et. al. (MAC) who claims that Ms. Trump’s brand (ITM) benefits unfairly from promotional activities by Ivanka, Donald Trump (individually, as father and as President) and their agents. Specifically, MAC claims that use of Trump products at governmental events and public endorsements (like those above) are unlawful and have produced ill-gotten gains for which the defendants should pay restitution. On 10-Apr-17 MAC requested the lawsuit be dismissed without prejudice subsequent to Ms. Trump’s promise to follow federal ethics rules. Much of media coverage of the case was less than flattering and took a tool on the brand even though the case was eventually withdrawn.
Being in the spotlight may come with significant challenges, but apparently the results aren’t all bad. Sales swelled in 2017 by approximately 166% over last year. G-III Apparel Group (the company that manufactures Ivanka Trump’s brand) reported a $17.9 million increase in net wholesale sales of the brand’s licensed products in the 12-month period ending 31-Jan-17 (according to reports filed with the Securities and Exchange Commission on 4-Apr-17).
With 3 years and 262 days remaining in the Trump Presidency, it will be interesting to see how the Ivanka Trump brand stands up to the additional regulation and scrutiny, indulgence and veneration inherent in being one of the most prominent families on the planet. The world will be watching.