Nordstrom shares surge after Trump tirade over Ivanka brand as critics slam him for misusing public office

A Nordstrom store is seen in Miami, Florida.
A Nordstrom store is seen in Miami, Florida.PHOTO: AFP

NEW YORK (Bloomberg, Reuters) - Nordstrom has become the darling of investors after the department store chain was lambasted by President Donald Trump on Twitter Wednesday (Feb 8) for dropping his daughter Ivanka's brand.

Shares of the department-store chain gained 4.1 per cent to US$44.53 after the president tweeted about the company, marking their biggest single-day advance in two months.

Trump slammed Nordstrom for dropping daughter Ivanka's brand, using his favourite social-media forum for calling out businesses.

In his tweet, the president said Ivanka Trump had been treated "so unfairly" by Nordstrom. "She is a great person - always pushing me to do the right thing! Terrible!"

After initially posting the message on his personal account, he later retweeted it from the official presidential handle, @POTUS.

 

"This is misuse of public office for private gains," Richard Painter, who served as Republican President George W. Bush's chief ethics lawyer, said in an email to Reuters.

"And it is abuse of power because the official message is clear - Nordstrom is persona non grata with the administration."

The wealthy New York real estate developer, who became president on Jan 20, has declined to sell off his businesses despite demands from critics that he does so to avoid thorny conflicts of interest.

Ivanka Trump ran a clothing and jewellery business bearing her name, in addition to other work for the Trump Organisation, before saying she would resign when her father was sworn in as president.

Her father's various contentious actions and comments have prompted boycott efforts by critics and have driven some consumers away from Trump family businesses.

Nordstrom tried to lower the tension on Wednesday by saying it had a "great relationship" with Ivanka Trump's team, and that the decision not to reorder merchandise only came after sales decreased.

"We've had open conversations with them over the past year to share what we've seen, and Ivanka was personally informed of our decision in early January," Nordstrom said in an e-mailed statement.

After sales of the brand "steadily declined," especially in the second half of last year, continuing to offer the collection no longer made sense.

Shares of Nordstrom dipped after Wednesday's tweet was posted, though they quickly recovered. The stock steadily climbed for the rest of the trading session, reaching its highest price since Jan 25.

During a White House press briefing, spokesman Sean Spicer painted Nordstrom's action as an attack on the president's daughter.

"For someone to take out their concern with his policies on a family member of his is just not acceptable. And the president has every right as a father to stand up to them," Spicer said.

A spokeswoman for the Ivanka Trump brand declined to comment.

'TOTALLY INAPPROPRIATE'

Democrats pounced on Trump for the tweet.

"I think it's inappropriate, but he's a totally inappropriate president, so it's totally in keeping with who he is," said Nancy Pelosi, the top US House of Representatives Democrat.

Senator Bob Casey, a Democrat, in a tweet indicated the matter should be referred to the federal Office of Government Ethics.

Some retailers continue to carry Ivanka Trump products but others have backed away. The move by the retailers comes amid an ongoing campaign called #GrabYourWallet, which encourages shoppers to boycott products with ties to President Trump, his family and his donors.

Usage of the hashtag on Twitter rose dramatically on Wednesday.

"President Trump said he is going to have nothing to do with his family businesses," said Robert Weissman, president of liberal watchdog group Public Citizen.

"His reaction to developments with his daughter's business line suggests that claim is untrue."

Trump's tweet left fellow Republicans in an uncomfortable position.

Republican Senator David Perdue of Georgia told Reuters of Trump's tweet, "That sounds like a personal matter to me." Perdue added, "He is a citizen and he is a citizen who is now president of the United States."

Republican Senator Ron Johnson of Wisconsin, asked whether the president should be criticising a publicly traded company over its business dealings with Trump's daughter, said, "I don't know the answer to that question. Let me think about what the answer is."

Since winning the presidential election on Nov 8, Trump has castigated specific companies on Twitter but this was his first tweet involving a business tied to his family since the victory.

Bush ethics lawyer Painter, who has been critical of Trump in the past, said Nordstrom could have cause for legal action if the Trump administration takes any adverse action against it.

A group including former White House ethics attorneys filed a lawsuit after Trump took office accusing him of allowing his businesses to accept payments from foreign governments, in violation of the US Constitution.