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Ivanka Trump shuts down her namesake clothing brand

Ivanka Trump, seen here July 18, has shut down her clothing line saying that her focus is on her "work in Washington." MUST CREDIT: Washington Post photo by Jabin Botsford

WASHINGTON -- Ivanka Trump is shutting down her namesake clothing brand because of her work in Washington, she said Tuesday, a rare acknowledgement by a Trump family member about the challenges of holding an influential White House position while owning a global business.

In doing so, the president's daughter and White House senior adviser has gone further than other Trump family members, who have remained active in both business and politics. She handed over day-to-day operations after her father won the election but continued to own the company - which raised ethical concerns that have dogged enterprises across the Trump empire.

But her brand, founded as a carefree fashion and lifestyle brand for young, professional women, has suffered from how polarizing it became during the campaign and her father's move into the Oval Office, enduring boycotts, lost sales and controversies that saw its goods yanked from retailers' shelves.

On Tuesday, Ivanka Trump said her "focus for the foreseeable future will be the work I am doing here in Washington" and called the company's closure "the only fair outcome for my team and partners." Company officials said the closure was a reflection of Ivanka Trump's deepening commitment to stay in Washington and push her father's policies.

Ethics experts have long called on the Trumps to separate from their businesses in order to avoid conflicts of interest.

Trump had made the decision in recent weeks to close the brand, company officials said.

But she appeared to leave the door open for reviving a business under her name. Trump will retain the copyrights and intellectual property associated with her brand and is continuing to seek trademarks, according to a person familiar with the situation. Company spokespeople said she has voiced no interest in reviving the company later on, and Trump said she did "not know when or if I will ever return to the business."

The Ivanka Trump brand, based in New York's Trump Tower with 18 employees, has suffered recently as retailers, including department-store giant Nordstrom, decided to stop selling its products. Online sales of Ivanka Trump merchandise at Amazon, Bloomingdale's, Macy's and Zappos have dropped more than 55 percent in the past year, according to data from Rakuten Intelligence.

At the same time, it has endured heavy backlash as a symbol of President Donald Trump's policies. Its dependence on foreign manufacturing - all of its dresses, shoes and handbags were produced in other countries, such as China and Indonesia - stood in contrast to the president's calls for more products to be made in America. Trump was also dogged by questions about her reliance on a largely female overseas workforce as she tried to tout American labor and women's issues.

"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 the research firm GlobalData Retail. "While the company is still viable, doing business has become far more challenging and these problems will only increase."

Ivanka Trump arrived at the company's headquarters on Tuesday afternoon, where she spoke to staff members and left after about 45 minutes, company officials said. Employees had been told in the morning to attend a staff meeting, when they were informed of the brand's immediate closure. Employees stayed afterwards for a glass of wine and will receive a severance package, officials said.

The closure came as a surprise even within the company, where as recently as last week officials had been discussing the implementation of long-delayed oversight of the foreign factories where its goods were made.

Company chief Abigail Klem said last year she had been planning her first trip to tour some of the facilities that make Ivanka Trump products, and she said the company would boost oversight of the treatment of its largely female workforce. The company never shared details of those initiatives.

Trump started her fine-jewelry line in 2007 and expanded to shoes, clothing and eyewear. Like many fashion brands, the Ivanka Trump company signed licensing deals with suppliers who made her goods by contracting out manufacturing work to factories around the world.

The company's staff largely negotiated design deals, promoted Ivanka Trump's "Women Who Work" brand and ran its social-media presence. In a goodbye tweet on Tuesday, the company said it "had cultivated amazing partnerships and friendships during the life of the brand."

Last March, shortly after the inauguration, Trump handed over operations to Klem following criticism that she could use her family's political platform to boost her brand. She retained ownership and power in the company, including the ability to veto new deals.

But the company, and Trump's colleagues in the White House, sometimes blurred the lines between her private business and public prominence. President Trump's senior adviser Kellyanne Conway told Fox News viewers last February to "go buy Ivanka's stuff," violating a federal rule banning public officials from using their position to endorse products.

"I find it hard to believe that anybody has suddenly had an ethics lightbulb go off 18 months into Trump's presidency," said Norman Eisen, the chief White House ethics lawyer under President Barack Obama and a chairman of the government watchdog group Citizens for Responsibility and Ethics in Washington, or CREW. "This is a family that has maintained unprecedented business ties."

Distancing herself from her company didn't assuage critics - or prevent a weakening of the business. Several retailers dropped the brand, including Canadian department store chain Hudson's Bay Co., which two weeks ago said it would remove all Ivanka Trump products from its website and 90 stores because of the brand's "performance."

As of Tuesday afternoon, Macys.com had marked down the brand's dresses as much as 53 percent, while Zappos was selling Ivanka Trump sandals for $56.25, down from $125. At Dillard's, all Ivanka Trump handbags had been "permanently reduced" by half.

A number of national retailers, including Lord and Taylor, Dillards, Bloomingdales and Amazon.com, carry the first daughter's line and will continue to do so until their agreements run out. (Jeff Bezos, founder and chief executive of Amazon, owns The Washington Post.)

Trump's brand of affordable fashion for young, cosmopolitan women became a polarizing political statement, bought in solidarity by Trump supporters and boycotted vigorously by others.

In December, she opened a store in the lobby of Trump Tower, where, she said, she hoped to sell handbags, jewelry and candles directly to consumers, raising concerns among ethics experts who called it another way for the Trump family to tap into supporters' wallets.

"Her ties to the president have been toxic to her brand," said Eric Schiffer, chairman of Reputation Management Consultants in Los Angeles. "She used to have a global audience, but the president's 'America First' agenda has alienated so many countries, and with that has come a disdain for anything Ivanka."

The Ivanka Trump company's layoffs come as Ivanka Trump campaigns across the country for the White House's "Pledge to America's Workers," in which U.S. companies are pushed to commit to greater hiring, training and education of its American workforce. In a Wall Street Journal editorial last week, she wrote, "We call upon employers large and small to join this crucial initiative to create more jobs, strengthen our economy and restore hopeful futures to countless families."

Trump will retain the copyrights and intellectual property associated with her brand, which analysts say leaves the door open for future relaunches. In addition, the Ivanka Trump brand applied for 15 Chinese trademarks last March, the day before Trump officially joined the White House, according to CREW. The company has said its trademarks are used, like many other companies, to protect its products from counterfeits, and that their applications were not timed to any political events.

"She's dissolving the company now but is continuing to get trademarks so she can sell her stuff all over the world later," said Richard Painter, a professor of law at the University of Minnesota and chief White House ethics lawyer for President George W. Bush. "What better time to get those trademarks than now, when every government around the world wants to play nice with" her father.

Ivanka Trump made more than $5 million from her fashion company between January 2016 and March 2017, according to financial disclosures released last year. She also received $3.9 million from her family's Washington, D.C., hotel last year, according to government disclosure forms.

Other Trump-branded businesses, many of which Ivanka had a hand in growing and in which she still holds a financial stake, have experienced differing fortunes since Trump's presidency began last year. The company's name has come down off of hotels in Toronto, Panama and New York's Soho neighborhood, as well as from some residential buildings in New York.

While the Trump Hotel in Washington charges some of the highest rates in the city and has become a popular meeting place for Republican political groups, religious organizations and businesses, data on other Trump properties including the Mar-a-Lago resort in Florida show signs of price drops as sports teams and charities move their business elsewhere.

Sales data on Trump-branded condominiums in New York City show them attracting lower prices than competing properties since Donald Trump became president. Meanwhile, the Trump Organization's plans to dramatically expand its hotel portfolio in the United States have failed to progress, having opened no hotels under its announced "Scion" and "American Idea" brands.

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This article was written by Abha Bhattarai and Drew Harwell,  both are reporters for The Washington Post. The Washington Post's Jonathan O'Connell contributed to this report.

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