President Trump’s Twitter attack on Seattle-based retailer Nordstrom sparked a momentary drop in its stock, but even as the brouhaha became a topic for a D.C. press conference, investors seemed to ignore Trump’s ire.
President Trump must be sorely disappointed if he was hoping his Wednesday morning tweet blasting Nordstrom for dropping his daughter’s fashion line would drive the company’s share price down.
Nordstrom’s stock rose 4 percent on a bizarre day that began with a midmorning tweet from Trump declaring, “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!”
The Seattle-based retailer’s shares dipped slightly but quickly bounced back to end the day solidly in positive territory — a switch from the pattern that has sent companies across America scurrying at the mere thought of a presidential brickbat via Twitter.
“It seems to me the nation as a whole is adjusting to the new political realities. The possibility of a presidential tweet is probably not as much a shock to Nordstrom now as it was to Boeing a month ago,” said Patrick Schoettmer, an instructor in Seattle University’s political-science department. “It will lose its impact over time. And that fits in with a long line of research [that says] presidents can be really persuasive but only if they use their bully pulpit infrequently.”
Many other retail stocks were also up Wednesday, including Macy’s, Kohl’s and JCPenney.
Previous targets of Trump’s ire had seen their share prices dip. Lockheed Martin’s stock dropped 2 percent after his tweet lambasting the high price of the company’s fighter jets, while General Motors and Toyota both saw slight dips in their shares after Trump criticism, according to The Washington Post.
But Nordstrom might be different as a consumer company that has most of its stores in urban Democratic strongholds, said Abhishek Borah, who teaches marketing and international business at the University of Washington’s Foster School of Business.
Borah pointed to a 2014 Time magazine article that said Nordstrom “is vastly more concentrated in Democratic districts than Republican ones.”
Investors might be calculating that Nordstrom’s customer base would likely not abandon the company because of Trump’s tweet, according to Borah.
By contrast, Lockheed and Boeing are vulnerable as major government defense contractors, and the big manufacturers are wary of import taxes.
Nordstrom’s decision to drop the Ivanka Trump line, and the subsequent president’s tweet, blew up into a national brouhaha Wednesday.
Nordstrom said last week it would stop carrying Ivanka Trump merchandise for the moment, explaining that “based on the brand’s performance we’ve decided not to buy it for this season.” Nordstrom declined to say if the decision was permanent and noted it cuts a number of brands each year.
Ivanka Trump’s label fired back, saying the brand saw a “significant” sales increase last year and that Nordstrom had purchased clothes from the line for this spring. A representative for the company told Bloomberg News that the collection would be available in 1,000 stores this year, up from about 800.
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Nordstrom issued a statement Wednesday reiterating its decision was based on business, not politics.
“Over the past year, and particularly in the last half of 2016, sales of the brand have steadily declined to the point where it didn’t make good business sense for us to continue with the line for now,” the company said. Nordstrom added that it’s talked with the Ivanka Trump team over the past year about the sales decline, and that she was “personally informed of our decision in early January.”
The matter even found its way into Wednesday’s White House press briefing.
When asked about the issue, White House press secretary Sean Spicer insisted Nordstrom’s decision was political and said the president had “every right” to post that tweet.“For people to take out their concern about his actions or his executive orders on members of his family — he has every right to stand up for his family and applaud their business activities, their success,” Spicer said.
Nordstrom’s co-presidents last week sent an email to their employees about President Trump’s executive order temporarily barring citizens from seven predominantly Muslim countries from entering the U.S. The message talked about the company’s founding by immigrant John W. Nordstrom and how it values diversity and inclusion.
Nordstrom said Wednesday that the email was not linked to the decision to drop the Ivanka Trump line.
Neiman Marcus and Belk also reportedly are dropping the Ivanka Trump line from their stores. T.J. Maxx and Marshalls are reportedly distancing themselves from the brand, with employees at the stores getting instructions to throw away the brand’s signs and mix Ivanka Trump merchandise with other brands, according to The New York Times. Trump critics are pressuring Macy’s to drop the line as well.
Reaction to President Trump’s tweet Wednesday was swift, with people tweeting such messages as: “.@realDonaldTrump Donald, what have we repeatedly said about using your office to influence the family business!” and “@realDonaldTrump You absolutely cannot use your office to punish companies who don’t want to do business with your family.”
Others tweeted in support of the president, saying: “@realDonaldTrump It’s extraordinarily bigoted of @Nordstrom to drop @IvankaTrump clothing line for purely political reasons. Not okay.”
Like much of Trump’s unconventional approach to his still-young presidency, his tweet tirades have drawn criticism from some observers of the institution.
“Most people would say what Trump is doing is unusual. And most would say it’s problematic,” said Schoettmer.