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Ethics experts ‘underwhelmed’ at Ivanka Trump closing fashion business

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Ivanka Trump
Ivanka Trump.
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McNamee/Getty Images


  • President Donald Trump’s daughter Ivanka Trump, an
    assistant to the president, announced the closure of her
    fashion business on Tuesday.
  • Ethics experts were “underwhelmed” at the
    news.

Ethics experts were “underwhelmed” at the news that Ivanka Trump,
President Donald Trump’s daughter and an assistant to the
president, opted to close her namesake
fashion brand
on Tuesday.

They said the move, while a step in the right direction, comes
amid other major conflicts of interest for Ivanka, her husband
Jared Kushner, a White House senior adviser, and the president,
which remain active.

“Eighteen months into the historically unprecedented and
profoundly conflicted activities of Ivanka, her husband, and her
father, this seems to me to be underwhelming,” Norman Eisen,
chief ethics lawyer under former President Barack Obama, told
Business Insider. “In part that’s because she’s not abandoning
other business connections including her profoundly troubling
trademarks in China and elsewhere, and because the conflicts are
accumulating for the family, including her husband and her
father, with every passing day.”

The Wall Street Journal reported that Ivanka grew frustrated with the
self-imposed ethics restrictions on her fashion brand, such as
the inability to strike new foreign deals, and felt that they
stunted its growth. Citing poor performance, a number of stores,
such as Nordstrom, Hudson’s Bay, and Jet.com, dropped the brand
since her father took office last year.

“After 17 months in Washington, I do not know when or if I will
ever return to the business, but I do know that my focus for the
foreseeable future will be the work I am doing here in
Washington,” Ivanka said in a statement. “So making this decision
now is the only fair outcome for my team and partners.”

According to Rakuten Intelligence, the brand’s online sales on
Amazon, Macy’s, Bloomingdale’s, and Zappos fell about 45% since
mid-2017 when compared to the previous year, The Wall Street Journal
reported
. In
November
, YouGov consumer perception survey found that her
fashion line fell to the bottom 10 of more than 1,600 brands
analyzed.

The brand saw growth during the 2016 election season. At the end
of last January, net sales of Ivanka-licensed apparel rose 61% to
$47.3 million from the previous year, a Securities and Exchange
Commission filing
from G-III showed.

While working in the White House, Ivanka continued to be updated
on the financial health of the company and earned a share of its
profits, even though she separated herself from its management
and operations prior to joining the administration. Ivanka
retained her ownership interest through a trust.

Her most recent financial disclosure showed the trust was valued
at more than $50 million and earned her more than $5 million in
income last year. Ivanka maintains a stake in the Trump
Organization, though she resigned from her position prior to
joining the administration.

In May, controversy surrounded Ivanka after her fashion brand was
awarded a number of Chinese trademarks just as her father pledged
to revive Chinese telecom giant ZTE.

‘How much’ conflicts ‘will be reduced will depend on how it is
done’

Eisen told Business Insider that Ivanka’s decision was likely
motivated more by the business performing poorly than by any
ethical concerns over conflicts.

Larry Noble, the senior director and general counsel
of the Campaign Legal Center, told Business Insider that Ivanka
shutting down her fashion brand “
is a small step that will
reduce some potential conflicts of interest.”

“How much they will be reduced will depend on how it is done,” he
said. “More importantly, she still does not acknowledge the
conflicts it presented, nor the continuing conflicts presented by
her interests in her family’s other businesses.”

Noble said he suspects the move was “driven, in part, by the
disconnect between the businesses practices and her attempts be
seen as socially conscious.”

Noah Bookbinder, executive director of the watchdog
group Citizens for Responsibility and Ethics in Washington, said
in a statement that although Ivanka’s decision was “a notable
step in the right direction” it’s “a small one that comes much
too late.”

“The ethics issues that arise from her ownership of the Ivanka
Trump Brand also arise from her ownership stake in the Trump
Organization, and still more issues arise from her father’s
ownership of that business,” he said. “If the Trump family truly
cared about ethics, they would fully divest themselves of these
assets — something they should have done before they entered the
White House.”

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