Wednesday, September 20, 2017

Ivanka’s biz prospers as politics mixes with business



By on April 18, 2017

FILE - In this Friday, Feb. 10, 2017, file photo, Ivanka Trump, right, walks with her husband, Jared Kushner, senior adviser to the president, to a news conference with President Donald Trump and Japanese Prime Minister Shinzo Abe, at the White House in Washington. Ivanka Trump's company continues to grow. Ethics lawyers fear the more her business expands, the more it may encroach on her ability, and husband, Jared Kushner, to credibly advise the president on core issues. (AP Photo/Evan Vucci, File)

In this Friday, Feb. 10, 2017, photo, Ivanka Trump, right, walks with her husband, Jared Kushner, senior adviser to the president, to a news conference with President Donald Trump and Japanese Prime Minister Shinzo Abe, at the White House in Washington. (AP Photo/Evan Vucci, File)

SHANGHAI – On April 6, Ivanka Trump’s company won provisional approval from the Chinese government for three new trademarks, giving it monopoly rights to sell Ivanka brand jewelry, bags and spa services in the world’s second-largest economy. That night, the first daughter and her husband, Jared Kushner, sat next to the president of China and his wife for a steak and Dover sole dinner at Mar-a-Lago.

The scenario underscores how difficult it is for the president’s daughter, who has tried to distance herself from the brand that bears her name, to separate business from politics in her new position at the White House.

As she crafts a political career from her West Wing office, her brand is flourishing, despite boycotts and several stores limiting her merchandise. U.S. imports, almost all of them from China, shot up an estimated 166 percent last year, while sales hit record levels in 2017. The brand, which Ivanka Trump still owns, says distribution is growing.

It has launched new activewear and affordable jewelry lines and is working to expand its global intellectual property footprint. In addition to winning the approvals from China, Ivanka Trump Marks LLC applied for at least nine new trademarks in the Philippines, Puerto Rico, Canada and the U.S. after the election.

The commercial currents of the Trump White House are unprecedented in modern American politics, ethics lawyers say. They have created an unfamiliar landscape riven with ethical pitfalls, and forced consumers and retailers to wrestle with the unlikely passions now inspired by Ivanka Trump’s mid-market collection of ruffled blouses, shifts and wedges.

Using the prestige of government service to build a brand is not illegal. But criminal conflict-of-interest law prohibits federal officials, like Ivanka Trump and her husband, from participating in government matters that could impact their own financial interest or that of their spouses. Some argue that the more her business broadens its scope, the more it threatens to encroach on the ability of two trusted advisers to deliver credible counsel to the president on core issues like trade, intellectual property and the value of Chinese currency.

“Put the business on hold and stop trying to get trademarks while you’re in government,” advises Richard Painter, who served as chief White House ethics lawyer under George W. Bush.

To address ethical concerns, Ivanka Trump has shifted the brand’s assets to a family-run trust valued at more than $50 million and pledged to recuse herself from issues that present conflicts. She is also no longer running her design business and has given day-to-day responsibility to Abigail Klem, president of the brand. Meanwhile, her husband has taken steps to distance himself from his sprawling New York real estate business, divesting some of his business interests including his stake in a major Fifth Avenue skyscraper.

“Ivanka will not weigh in on business strategy, marketing issues or the commercial terms of agreements,” her attorney, Jamie Gorelick, said in a statement. “She has retained authority to direct the trustees to terminate agreements that she determines create a conflict of interest or the appearance of one.”

In a recent interview with CBS News, Trump argued that her business would be doing even better if she hadn’t moved to Washington and placed restrictions on her team to ensure that “any growth is done with extreme caution.”

China, however, remains a nagging concern.

“Ivanka has so many China ties and conflicts, yet she and Jared appear deeply involved in China contacts and policy. I would never have allowed it,” said Norman Eisen, who served as chief White House ethics lawyer under Barack Obama. “For their own sake, and the country’s, Ivanka and Jared should consider stepping away from China matters.”

Instead, the first daughter and her husband have emerged as prominent interlocutors with China, where they have both had significant business ties. Last year, Kushner pursued hundreds of millions of dollars in real estate investments from Anbang Insurance Group, a financial conglomerate with close ties to the Chinese state. After media reports about the deal, talks were called off.

Publicly, Ivanka Trump has taken a gracious, charming approach toward Beijing. During the Mar-a-Lago meetings, her daughter, 5-year-old Arabella, stood in a gilded room and sang a traditional Chinese song, in Mandarin, for China’s president, Xi Jinping. The video, which was lavishly praised by Chinese state media, played over 2.2 million times on China’s popular news portal qq.com.

The week of the summit, 3.4 tons of Ivanka Trump handbags, wallets and blouses arrived in the U.S. from Hong Kong and Shanghai. U.S. imports of her merchandise grew an estimated 40 percent in the first quarter of this year, according to Panjiva Inc., which maintains and analyzes global shipping records.

Painter, the former Bush administration lawyer, recommended full recusal from issues related to trade with China. That is likely to be difficult because trade is so deeply embedded in the US-China relationship and has been linked with other matters, like North Korea.

“The danger is that with any discussion with the Chinese, one party or the other may try to bring up trade,” he said. “That’s a slippery slope that may require her or Jared to step out of the room.”

Gorelick, Ivanka Trump’s attorney, said that she and her husband would steer clear of specific areas that could impact her business, or be seen as conflicts of interest, but are under no legal obligation to step back from huge swaths of policy, like trade with China.

Under the rules, Trump would recuse herself from conversations about duties on clothing imported from China, Gorelick said, but not broad foreign policy.

“In between, you have to assess it case-by-case,” she said.

Trademarks can be signs of corporate ambition, though many countries – such as China, where “trademark squatting” is rampant – also allow for defensive filings to prevent copycats from using a brand.

Trademarks pose ethical, and possibly legal, implications for government employees because they are granted by foreign states and confer the monopoly right to sell branded products in a particular country – an entitlement that can be enormously valuable. Intellectual property lawyers say trademarks are also a crucial prerequisite for cutting licensing deals, which form the basis of both Ivanka and Donald Trump’s global business strategy.

“The brand has filed, updated, and rigorously protected its international trademarks over the past several years in the normal course of business, especially in regions where trademark infringement is rampant,” said Klem in a statement.

Today, 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. Altogether, they cover a wide range of goods and services, including cosmetics, jewelry, leather handbags, luggage, clothes, shoes, retail, spa and beauty services. There is no sign the recent approvals were particularly swift. China’s Trademark Office did not respond to a request for comment.

Globally, the company has more than 180 pending and registered trademarks in countries including Canada, India, Japan, Israel, Mexico, Turkey and Saudi Arabia, as well as the U.S. and Europe, public records show. In December, the company applied for five trademarks, covering handbags and wallets in Puerto Rico, and lingerie and other clothes in the U.S. After the inauguration, the company filed four more applications, for branded clothing and shoes in the Philippines, and perfume and other items in Canada.

Ivanka Trump did not sign off on the new trademark applications, her brand said in a statement, adding that they are “not necessarily an indication that the brand is planning to launch a category or a store in a specific territory.”

Whatever the future plans, right now sales are growing – helped, some argue, by the glow of Ivanka Trump’s political rise.

The G-III Apparel Group Ltd., which makes Ivanka Trump clothes, said net sales for the collection increased by $17.9 million during the year that ended Jan. 31.

The overall brand itself says revenues rose 21 percent last year, with early February seeing some of the “best performance ever,” according to a statement by Klem. Because it is privately held, the brand does not have to declare its earnings or where revenues come from. The actual corporate structure of Trump’s retail business remains opaque. Kushner’s financial disclosure form lists two dozen corporate entities that appear directly related to his wife’s brand. Trump herself has yet to file a disclosure.

Data from Lyst, a massive fashion e-commerce platform, indicates some of this growth coincided with specific political events.

The number of Ivanka Trump items sold through Lyst was 46 percent higher the month her father was elected president than in November 2015. Sales spiked 771 percent in February over the same month last year, after White House counselor Kellyanne Conway exhorted Fox viewers to “Go buy Ivanka’s stuff.” Conway was later reprimanded. The bounce appears somewhat sustained. March sales on Lyst were up 262 percent over the same period last year.

“You can’t separate Ivanka from her role in life and from her business,” said Allen Adamson, founder of BrandSimpleConsulting. “Her celebrity status is now not only being fueled by her wealth and her family connection, but by her huge role in the White House. All that buzz is hardwired to her products.” That, he added, is a competitive advantage other brands just can’t match – though it does come with risk.

Things could easily cut the other way for the first daughter. Ashley King, 28 of Calabasas, California, bought Ivanka Trump black flats and a cardigan several years ago. But King, who voted for Hillary Clinton, said she believes Trump’s role in the White House represents a conflict of interest.

“This is bothering me more and more,” she said. As for the Ivanka Trump items in her closet, she said, “I will be donating them.”

Online:

Daily change in Ivanka Trump’s orders on Lyst – https://w.graphiq.com/w/4VDhSHfGfQh

Monthly change in Ivanka Trump’s orders on Lsyt – https://w.graphiq.com/w/in9MnNw1FAN

The Ivanka Trump Collection Quarterly US Imports – https://w.graphiq.com/w/fCOZGxSvnTL

Timeline: Ivanka Trump goes to Washington, and sales surge

SHANGHAI – As Ivanka Trump builds a new political career as an adviser to her father, the commercial engine of her lifestyle brand is going strong. Sales, by some measures, have reached record highs this year.

Trump founded the brand in 2007 and still owns it, but stepped back from management and put its assets in a family-run trust before taking on an official role at the White House. Despite efforts to distance herself from her business to address ethical concerns, Trump remains, for many, the living embodiment of the brand that bears her name.

July 20, 2016: Ivanka Trump forms four new companies in Delaware to handle licensing contracts for baby products and costume jewelry.

July 21, 2016: Donald Trump accepts Republican nomination for president.

July 22, 2016: “Shop Ivanka’s look from her #RNC speech,” @IvankaTrump tweets, along with a link to her collection’s $138 blush sheath dress at Macy’s online.

Sept. 29, 2016: Her company announces two new licensing agreements, for affordable fashion jewelry and baby accessories.

Nov. 8, 2016: Donald Trump wins the election. Sales of Ivanka merchandise on Lyst.com, a large e-commerce platform, bump 46 percent higher for the month.

Nov. 13, 2016: Ivanka Trump appears on “60 Minutes” to discuss her father’s electoral win. Her jewelry company emails a “style alert” to reporters noting that she wore one of her “favorite” bangles, a $10,800 bracelet from her own collection, on the show. Ensuing criticism prompts the brand to apologize.

Dec. 4, 2016: The New York Times reports that Ivanka Trump sat in on a meeting with her father and the prime minister of Japan, as her company negotiated a licensing deal with a firm the Japanese government owned a large stake in. The deal was put on hold, according to Abigail Klem, who now runs Ivanka Trump’s brand.

Dec. 27, 2016: Ivanka Trump Marks LLC applies for five new trademarks covering purses, wallets and other leather goods in Puerto Rico, and clothing, including swimsuits and lingerie in the U.S., public records show.

Jan. 11, 2017: Ivanka Trump announces she will take a “formal leave of absence” from executive positions at the Trump Organization and her lifestyle brand.

Jan. 20, 2017: Donald Trump becomes the 45th president of the United States.

Feb. 8, 2017: Ivanka’s company applies for two more clothing trademarks in the Philippines, where it already holds three marks, according to the Intellectual Property Office of the Philippines.

Feb. 9, 2017: Speaking on the morning show “Fox and Friends,” White House counselor Kellyanne Conway encourages viewers to, “go buy Ivanka’s stuff,” boasting about giving the brand “a free commercial.” It apparently worked, sparking a 771 percent surge in the brand’s sales that month on Lyst.com over Feb. 2016. The White House later “counseled” Conway for inappropriately promoting the brand.

Feb. 13, 2017: Trump meets with Canadian Prime Minister Justin Trudeau at the White House.

Feb. 20, 2017: Ivanka Trump Marks LLC wins preliminary approval for a trademark covering branded leather handbags in China, where the company has 52 pending or registered trademarks listed in the government trademark database.

Feb. 22, 2017: Ivanka Trump Marks LLC applies for another trademark, covering perfume, among other things, in Canada, where it holds 22 pending or registered marks, according to the Canadian Intellectual Property Office.

March 1, 2017: Ivanka Trump Marks LLC applies for another new trademark in the Philippines, covering clothes and shoes.

March 3, 2017: Ivanka Trump is photographed disembarking from Air Force One in a stripe asymmetrical skirt from her own collection, available on Lyst.com for $45.

March 29, 2017: Ivanka Trump joins her father’s administration as an unpaid employee.

April 6, 2017: Ivanka Trump and her husband, Jared Kushner, sit next to Chinese President Xi Jinping and his wife, Peng Liyuan, at a state dinner at Mar-a-Lago. That same day, China grants her company preliminary approval for three trademarks that confer monopoly rights to sell Ivanka brand jewelry, bags and spa services in the world’s second-largest economy.

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