Ivanka Inc.’s global reach

The pres­i­dent said he would re­turn jobs; his daugh­ter’s com­pany uses for­eign la­bor.

The Denver Post - - BUSINESS - By Matea Gold, Drew Har­well, Ma­her Sat­tar and Si­mon Denyer

On In­au­gu­ra­tion Day, Pres­i­dent Don­ald Trump stood in front of the U.S. Capi­tol and vowed that his “Amer­ica First” agenda would bring jobs back to the United States.

“We must pro­tect our bor­ders from the rav­ages of other coun­tries mak­ing our prod­ucts, steal­ing our com­pa­nies and de­stroy­ing our jobs,” he de­clared, adding: “We will fol­low two sim­ple rules — buy Amer­i­can and hire Amer­i­can.”

Look­ing on from the front of the

stage was Trump’s daugh­ter Ivanka, the celebrity and fash­ion en­tre­pre­neur who soon would join him in the White House.

The first daugh­ter’s cause would be im­prov­ing the lives of work­ing women, a theme she had de­vel­oped at her cloth­ing line. She also brought a di­rect link to the global econ­omy the pres­i­dent was rail­ing against — a con­nec­tion that was play­ing out at that very mo­ment on the Pa­cific Coast.

As the Trumps stood on stage, a hulk­ing con­tainer ship called the OOCL Ho Chi Minh City was pulling into the har­bor of Long Beach, Calif., car­ry­ing around 500 pounds of for­eign-made Ivanka Trump span­dex-knit blouses.

An­other 10 ships haul­ing Ivanka Trump-branded shoes, cardi­gans and leather hand­bags bound for the United States were float­ing in the north Pa­cific and At­lantic oceans and off the coasts of Malta, Malaysia, Ja­pan, South Korea and Ye­men.

Those global jour­neys — along with mil­lions of pounds of Ivanka Trump prod­ucts im­ported into the United States in more than 2,000 ship­ments since 2010 — il­lus­trate how her busi­ness prac­tices col­lide with some of the key prin­ci­ples she and her fa­ther have cham­pi­oned in the White House.

While Pres­i­dent Don­ald Trump has chas­tised com­pa­nies for out­sourc­ing jobs over­seas, an ex­am­i­na­tion by The Wash­ing­ton Post has re­vealed the ex­tent to which Ivanka Trump’s com­pany re­lies ex­clu­sively on for­eign fac­to­ries in coun­tries such as Bangladesh, In­done­sia and China, where low-wage la­bor­ers have limited abil­ity to ad­vo­cate for them­selves.

And while Ivanka Trump pub­lished a book this spring declar­ing that im­prov­ing the lives of work­ing women is “my life’s mis­sion,” The Post found that her com­pany lags be­hind many in the ap­parel in­dus­try when it comes to mon­i­tor­ing the treat­ment of the largely fe­male work­force em­ployed in fac­to­ries around the world.

From big brands such as Adi­das and Kenneth Cole to smaller, newer play­ers like Cal­i­for­nia-based Ever­lane, many U.S. cloth­ing com­pa­nies have in re­cent years made pro­tect­ing fac­tory work­ers abroad a pri­or­ity — hir­ing in­de­pen­dent au­di­tors to mon­i­tor la­bor con­di­tions, press­ing fac­tory own­ers to make im­prove­ments and pro­vid­ing con­sumers with de­tails about the over­seas fa­cil­i­ties where their goods are pro­duced.

A hands-off ap­proach

But the Trump brand has taken a more hands-off ap­proach. Al­though ex­ec­u­tives say they have a code of con­duct that pro­hibits phys­i­cal abuse and child la­bor, the com­pany re­lies on its sup­pli­ers to abide by the pol­icy.

The cloth­ing line de­clined to dis­close the lan­guage of the code.

Trump, who now works full time in the White House, has stepped away from daily op­er­a­tions of her busi­ness. She has as­sumed a high-pro­file place on the world stage — a role that was on dis­play ear­lier this month when she briefly filled in for her fa­ther dur­ing a meet­ing with for­eign leaders, seated be­tween the pres­i­dent of China and the Bri­tish prime min­is­ter.

Trump still owns her com­pany, which has faced in­creas­ing scru­tiny in re­cent months for its use of over­seas fac­to­ries, and her rep­re­sen­ta­tives have said she has the power to veto new deals.

Trump did not re­spond to re­quests for com­ment about what ef­forts she made to over­see her com- pany’s sup­ply chain be­fore she joined the ad­min­is­tra­tion.

Her at­tor­ney Jamie Gore­lick told The Post in a state­ment that Trump is “con­cerned” about re­cent re­ports re­gard­ing the treat­ment of fac­tory work­ers and “ex­pects that the com­pany will re­spond ap­pro­pri­ately.”

In the wake of Trump’s de­par­ture, the brand has be­gun to ex­plore hir­ing a non­profit work­ers’ rights group to in­crease over­sight of its pro­duc­tion and help im­prove fac­tory con­di­tions, the com­pany’s ex­ec­u­tives told The Post.

Abi­gail Klem, who has been the brand’s pres­i­dent since 2013, said she is plan­ning her first trip to tour some of the fa­cil­i­ties that make Ivanka Trump prod­ucts in the com­ing year.

Klem said she is con­fi­dent that the com­pany’s sup­pli­ers op­er­ate “at the high­est stan­dards,” adding, “Ivanka sought to part­ner with the best in the in­dus­try.”

The com­pany had not yet matched the poli­cies of other la­bels be­cause it was newer and smaller, she added, but is now fo­cus­ing on what more it can do.

“The mis­sion of this brand has al­ways been to in­spire and em­power women to cre­ate the lives they want to live and give them tools to do that,” Klem said. “We’re look­ing to en­sure that we can sort of live this mis­sion from top to bot­tom with our li­censees, with our sup­ply chain.”

The com­pany still has no im­me­di­ate plans to fol­low the emerg­ing in­dus­try trend of pub­lish­ing the names and lo­ca­tions of fac­to­ries that pro­duce its goods. It de­clined to pro­vide a list of the fa­cil­i­ties.

Trac­ing prod­ucts

The Post used data drawn from U.S. cus­toms logs and in­ter­na­tional ship­ping records to trace Trump­branded prod­ucts from farflung fac­to­ries to ports around the United States. The Post also in­ter­viewed work­ers at three gar­ment fac­to­ries that have made Trump prod­ucts who said their jobs of­ten come with ex­haust­ing hours, sub­sis­tence pay and in­sults from su­per­vi­sors if they don’t work fast enough.

“My monthly salary is not enough for ev­ery­day ex­penses, also not for the fu­ture,” said a 26-year-old sewing op­er­a­tor in Subang, In­done­sia, who said she has helped make Trump dresses.

Like many U.s.-based ap­parel com­pa­nies, the Trump brand signs deals with sup­pli­ers, which, in turn, con­tract man­u­fac­tur­ing work to fac­to­ries around the world. The sys­tem al­lows prod­ucts to be sold to con­sumers for lower prices and cre­ates eco­nomic op­por­tu­nity — and risks — for work­ers in poor re­gions.

In China, where three ac­tivists in­ves­ti­gat­ing fac­to­ries mak­ing her line re­cently were ar­rested, as­sem­bly­line work­ers pro­duce Ivanka Trump wo­ven blouses, shoes and hand­bags. La­bor­ers in In­done­sia stitch to­gether her dresses and knit tops. Suit jack­ets are as­sem­bled in Viet­nam, cot­ton tops in In­dia and denim pants in Bangladesh — a coun­try with a huge ap­parel in­dus­try where gar­ment work­ers typ­i­cally earn a min­i­mum wage of about $70 a month and where some re­cently have faced a harsh crack­down from fac­tory own­ers af­ter seek­ing higher pay.

And in Ethiopia, where man­u­fac­tur­ers have boasted of pay­ing work­ers a fifth of what they earn in Chi­nese fac­to­ries, work­ers made thou­sands of pounds of Ivanka Trump-brand shoes in 2013, ship­ping data show.

Klem, the Trump brand pres­i­dent, said the com­pany is ex­plor­ing ways to pro­duce some goods in the United States but that “to do it at a large scale is cur­rently not pos­si­ble.”

In­dus­try ex­perts say about 97 per­cent of all cloth­ing and shoes pur­chased in the United States is im­ported from coun­tries where wages are lower and prod­ucts can be made more cheaply.

In­stead of pulling pro­duc­tion back into the United States, the ap­parel in­dus­try has been fo­cused on a dif­fer­ent strat­egy: try­ing to re­as­sure Amer­i­can con­sumers that their re­tail pur­chases are not the re­sult of ex­ploita­tion.

A wide range of cloth­ing lines now in­spect their own sup­ply chains to make sure la­bor stan­dards are met, the com­pa­nies say. Among them is Levi Strauss, which, like Trump’s brand, li­censes some of its pro­duc­tion from a large New York­based cloth­ing dis­trib­u­tor called G-III Ap­parel.

A Levi spokes­woman told The Post that the com­pany in­spects its pro­duc­tion fa­cil­i­ties an­nu­ally and has pub­lished fac­tory information since 2005.

Help­ing la­bor­ers

Many smaller brands turn to in­dus­try-backed groups, such as the Fair La­bor As­so­ci­a­tion or the Sus­tain­able Ap­parel Coali­tion, to help ad­dress fac­tory con­di­tions and worker treat­ment.

Kro­chet Kids, which sells dresses for less than $60, in­cludes cloth­ing tags hand­signed by work­ers at its fa­cil­i­ties in Uganda and Peru. Ref­or­ma­tion, whose dress Trump wore to a re­cent con­gres­sional pic­nic, screens its over­seas sup­pli­ers and re­cently moved to an ex­panded fac­tory in down­town Los An­ge­les, where it of­fers guided tours.

“The ques­tions to­day aren’t whether to en­gage in, but whether to go be­yond, all the way down to the cot­ton fields,” said Doug Cahn, a for­mer Ree­bok ex­ec­u­tive who pi­o­neered the devel­op­ment of cor­po­rate codes of con­duct and now con­sults for brands and man­u­fac­tur­ers.

Ivanka Trump was a 26year-old model and guest judge on her fa­ther’s re­al­ity show, “The Ap­pren­tice,” when she took on her first solo ven­ture out­side the fam­ily busi­ness: lend­ing her name and cre­ative en­ergy to a Man­hat­tan di­a­mond bou­tique.

Ini­tially, Trump’s brand put an em­pha­sis on sus­tain­abil­ity. In 2011, her com­pany in­tro­duced a short-lived bridal jew­elry col­lec­tion made from “eco-friendly” Cana­dian-mined di­a­monds and re­cy­cled plat­inum.

By then, she had started ex­pand­ing into other prod­ucts, even­tu­ally sign­ing deals for clothes, shoes and hand­bags.

Ship­ping data show that tons of Ivanka Trump­brand shoes were rolling off fac­tory pro­duc­tion lines in Dong­guan, the sprawl­ing in­dus­trial city in south­ern China, and onto con­tainer ships with names such as APL Bei­jing and Hyundai Dy­nasty.

Trump’s cloth­ing line — styled to sell an im­age of mod­ern met­ro­pol­i­tan glam- our — quickly be­came the core of her busi­ness, with mid-mar­ket prices and an ex­pand­ing col­lec­tion of stylish pumps, off-theshoul­der tops and flow­er­print cock­tail dresses.

In late 2012, Trump signed a deal with G-III, an es­tab­lished ap­parel group known for its work with Guess, Calvin Klein and celebrity brands such as Jes­sica Simp­son. Trump’s col­lec­tion flour­ished and, with it, pro­duc­tion ramped up in G-III’S con­tract fac­to­ries across China and Viet­nam, ac­cord­ing to ship­ping data.

In 2016, G-III told Forbes that the Ivanka Trump cloth­ing line had gen­er­ated $100 mil­lion in re­tail rev­enue in the past year.

Trump served as her com­pany’s star mar­keter, wear­ing her brand’s nude heels and a $10,000 bracelet dur­ing photo shoots and TV in­ter­views.

In last year’s pres­i­den­tial cam­paign, Trump took the op­por­tu­nity to show­case her prod­ucts on the na­tional stage. Af­ter she paid trib­ute to her fa­ther at the Repub­li­can Na­tional Con­ven­tion in one of her soft-pink sheath dresses, her so­cial me­dia team urged buy­ers to “shop Ivanka’s look,” and the $138 Chi­nese-made dress quickly sold out.

In the com­pany’s Trump Tower head­quar­ters, a staff of about 16 em­ploy­ees runs the Ivanka Trump de­sign team, so­cial me­dia ac­counts and brand­ing cam­paigns – in­clud­ing #Women­whowork, a move­men­tas-hash­tag that emerged as the com­pany’s driv­ing motto.

Its mar­ket­ing mixes pro­mo­tions for evening bags with cel­e­bra­tions of fe­male power. What was once ad­ver­tised as trendy cloth­ing for women in “the boardroom and be­yond” has evolved into what Ivanka­trump.com calls “a so­lu­tion-ori­ented life­style brand, ded­i­cated to the mis­sion of in­spir­ing and em­pow­er­ing women to cre­ate the lives they want to lead.”

In re­cent months, how­ever, ef­forts to mar­ket the up­beat Ivanka Trump cloth­ing brand have run head­long into the po­lar­iz­ing Trump po­lit­i­cal brand.

Klem said the con­tro­ver­sies have not hurt sales. She de­clined to dis­close fig­ures, but said that the brand’s busi­ness is “grow­ing rapidly.” Rev­enue was up 21 per­cent in 2016, with con­tin­u­ing growth in 2017, ex­ec­u­tives said.

John Mac­dougall, Afp/getty Images

Pres­i­dent Don­ald Trump talks with his daugh­ter Ivanka dur­ing a work­ing ses­sion at the G20 Sum­mit in Ham­burg, Ger­many, ear­lier this month.

Ben Depp, The Wash­ing­ton Post

Carly Mcken­zie, hold­ing an Ivanka Trump dress that she has worn to church and a fam­ily re­union, says her pur­chase was driven by the mo­ti­va­tion to sup­port Pres­i­dent Don­ald Trump and his old­est daugh­ter.

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