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Backlash over dropping Ivanka Trump’s fashion line didn’t hurt Nordstrom

LiveMint logoLiveMint 07-03-2017 Kim Bhasin

New York: It didn’t take long for the fireworks to begin. After it was revealed a few weeks ago that Nordstrom dropped Ivanka Trump’s fashion line for poor sales, her father criticized the department store for picking on his child. “My daughter Ivanka has been treated so unfairly by Nordstrom,” President Donald Trump said in a message posted on Twitter 8 February. “She is a great person—always pushing me to do the right thing! Terrible!”

The Nordstrom slam wasn’t as stark as when Trump called for a Macy’s Inc. boycott in 2015 after it booted his menswear line. But back then, he wasn’t in the White House, or facing what supporters see as a tsunami of unfair media coverage. And this time, it was his daughter. While the Republican’s critics applauded Nordstrom’s decision, agitated Trump backers launched boycotts and even filmed themselves storming one store in protest.

In the two weeks following the president’s complaint, the share of his supporters who had an unfavourable view of Nordstrom doubled, rising as high as 30%, according to data from researcher Morning Consult Intelligence. Even those Trump fans who counted themselves devotees of the retailer dropped away. But despite this showing of anti-Nordstrom sentiment, the company’s overall favourable rating stayed constant at 46% among all voters—the implication being that other consumers were picking up the slack.

The uproar seemed to dissipate quickly. Though social conversations about Seattle-based Nordstrom spiked after Trump’s post, the majority of talk was neutral as people merely shared news, according to data from social media analytics firm Crimson Hexagon. Hundreds of thousands of other posts took a side, with pro-Nordstrom opinions slightly outweighing the negative ones. Either way, the buzz fizzled fast.

ALSO READ | Nordstrom shrugs off Donald Trump’s Twitter criticism as shares climb

Wall Street analysts also dismissed Nordstrom’s Ivanka saga as a temporary diversion. Oliver Chen, who works for Cowen & Co., estimated in a note to clients that Ivanka Trump may account for less than 1% of Nordstrom’s annual revenue, anyway. So direct impact on sales would be insignificant as well.

“Something like this is noise,” said Bridget Weishaar, an analyst at Morningstar. “In the long term, this is not going to change whether this is a company that has a sustainable competitive advantage or not.”

Nordstrom, for its part, has maintained that its decision was based on brand performance, not politics. Sales of the Ivanka Trump line at the store fell 32% late last year, according to internal data obtained by the Wall Street Journal.

Nordstrom has tried hard to assure shoppers that it’s trying to stay out of partisan politics.

“This is a sharply divisive subject,” co-president Pete Nordstrom wrote in a memo to employees while anti-Trump activists were boycotting the store last year. “No matter what we do, we are going to end up disappointing some of our customers. Every single brand we offer is evaluated on their results—if people don’t buy it, we won’t sell it.”

In late February, Nordstrom posted a profit of $1.37 a share for its most recent reported quarter, beating analyst estimates of $1.15. (The retailer is reducing spending and cutting down on inventory.)

The retailer declined to comment this week on recent twists in public sentiment, but when previously asked during a conference call whether Trump’s comments helped or hurt, Pete Nordstrom said the president didn’t have much of an impact. “No, that would be negligible,” said Nordstrom. Bloomberg

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