Dive Brief:
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Nordstrom will continue selling merchandise from Ivanka Trump, daughter of controversial president-elect Donald Trump, who sells apparel and accessories through her own brand, according to an email to employees from co-president Pete Nordstrom obtained by Fortune.
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“We’ve heard from customers, including some who are long time loyal customers, threatening a boycott of Nordstrom if we continue to carry the line. Similarly, we’ve heard from customers who say they will boycott Nordstrom if we stop carrying the brand. This is a sharply divisive subject. No matter what we do, we are going to end up disappointing some of our customers," Nordstrom writes, adding that "Every single brand we offer is evaluated on their results — if people don’t buy it, we won’t sell it,” and that Ivanka Trump’s brand “has grown to be a sizable and successful business.”
- But Nordstrom also risks alienating employees. Fortune talked to one staffer who said “Working for a company that doesn’t take a stand on these issues, and chooses profit, is not something that makes me feel great about where I sell my talent. I’ll be updating my résumé this week.”
Dive Insight:
A social media boycott dubbed #grabyourwallet calls for some 50 retailers to stop selling products with the Trump name, including those from Ivanka and Donald Trump himself. Online shoe seller shoes.com has already pulled Ivanka Trump products in response to the boycott; Macy’s, another #grabyourwallet target, ended its longtime relationship with Donald Trump and his products after he made disparaging remarks about Mexican immigrants during his president campaign launch announcement, though the retailer continues to sell Ivanka Trump’s merchandise.
Nordstrom is also in the crosshairs of the #grabyourwallet campaign, but the Pete Nordstrom email obtained by Fortune reveals the retailer aims to be politically “agnostic” and will continue to make merchandising decisions based on sales.
Companies are in a tight spot when it comes to political stances. Evidence does suggest that consumers want companies to take a stand. A 2014 study by policy and communications firm Global Strategy Group found that 80% of respondents believe corporations should take action on important issues in society, up from 72% a year before. In addition, 79% say that it’s appropriate for enterprises to advocate on an issue pertinent to their industry (up slightly from 78%), although many also agreed that “companies should tread carefully on controversial issues.”
In contrast to Nordstrom’s hope for political agnosticism, Starbucks CEO Howard Schultz, during a 2013 investors meeting where a shareholder complained about backlash the coffeehouse chain suffered over its support of gay marriage, On the spot, Schultz defended Starbucks' position, saying. “Not every decision is an economic decision.”
There is also precedent for businesses declaring controversial positions, then walking back their advocacy. For example, the son of Chick-fil-A CEO S. Truett Cathy once spoke out against gay marriage, but the fast food chain has steered clear of political discourse as its business has expanded nationwide, and even sponsored a gay pride event in Iowa last year.
Retail consultant Bob Phibbs, president and CEO of New York-based the Retail Doctor, says that while Chick-fil-A took a stand for exclusivity, it typically behooves retailers to declare themselves on the side of inclusion on issues of diversity and discrimination. Earlier this year, for example, Target stated it would allow transgender people to use bathrooms and fitting rooms matching their identity, a public declaration that was “on trend,” Phibbs told Retail Dive earlier this year. In the end, being inclusive is the best way to reach a wider swath of customers, Phibbs said: "It all comes down to that question of 'Who is our customer, and who is the fringe.'"
Retailers may find that holding onto Ivanka Trump’s products is different than selling items with Donald Trump’s name, but it remains to be seen whether her brand continues to escape the fallout of the highly divisive election, which was marked by anti-immigrant and other bigoted remarks by Trump and his followers — something that has continued through his transition.