Column: Nordstrom stock shrugs off Trump’s tweet attack, showing he’s become a paper tiger
President Trump staged another tweet attack on an American corporation on Wednesday, this time raking Nordstrom Inc. for the supposed crime of dropping his daughter Ivanka’s fashion line.
At about 10:51 a.m. New York time, Trump tweeted, “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person -- always pushing me to do the right thing! Terrible!”
This attack follows Trump tweets aimed at Boeing and Lockheed Martin, but there are a few especially notable aspects to it. First, it was entirely personal: The critiques of Boeing and Lockheed were at least ostensibly related to public policy — he was questioning the cost of Defense Department procurements from those companies. But there’s no public policy aspect to whether Nordstrom continues to carry Ivanka’s merchandise, only the question of how much lucre flows into the Trump family’s pocket.
Second, this tweet was particularly incoherent. What could Ivanka’s being “a great person” have to do with Nordstrom’s business decisions, even assuming for the sake of argument that it’s true?
Third, and perhaps most important from a business standpoint, the market impact of Trump’s tweet was especially evanescent. The big retailer’s stock took a hit around the time of the tweet, falling about 0.65% to $42.47 as trading volume soared from about 6,700 shares in the minute or so before the tweet dropped to roughly a half-million shares during the four minutes that followed. But the action was over soon thereafter; by 2:01 p.m. New York time, Nordstrom was back above its pre-Trump peak. The shares closed at $44.53, a gain of more than 4% on a day when the rest of the market was essentially flat.
Nordstrom announced Feb. 2 that it was dropping Ivanka-branded shoes and handbags from its merchandise offerings starting with the spring season, which is starting now. The company attributed the decision to the brand’s poor “performance,” rather than to politics.
When Trump first started hectoring corporations by name via Twitter, we observed that his market-moving tweets were a scandal waiting to happen. There was the chance that a member of his inner circle clued in to his tweeting plans might try to trade ahead of them. Moreover, these off-the-cuff tweets signaled that Trump was insensitive to the fact that every word of a president “is parsed to the nth degree, every thought magnified to global significance, no matter how casual or careless.”
Accordingly, while it’s not uncommon for presidents to try to jawbone industries or even individual companies, it’s very unusual for a president to settle personal scores with a corporation using his bully pulpit.
But the Nordstrom tweet appears to have eradicated the line between the public interest and Trump’s interest. That’s why it was termed “outrageous” in a tweet by Norm Eisen, a former chief ethics officer for the Obama White House and the co-founder of the watchdog group Citizens for Responsibility and Ethics in Washington. Trump not only issued the tweet from his personal account, but retweeted it on his official @POTUS account.
Trump spokesman Sean Spicer illustrated the depth of the Administration’s insensitivity to conflicts of interest in his defense of the tweet. Trump is “leading this country,” he said at a press briefing Wednesday. “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.”
Criticism also came from the other side of the political divide, with Ari Fleischer, the former press secretary for George W. Bush, tweeting, “This is something a father would say. It’s not the type of thing a President of the United States should say.”
And as Kevin Drum of Mother Jones observed, there’s an aspect of commercial favoritism to the Nordstrom’s tweet that makes it especially inappropriate: Nordstrom was not the only company that is dropping Ivanka’s merchandise. So have Neiman-Marcus and at least four other retailers. T.J. Maxx, which earlier was reported to have dropped Ivanka merchandise, has said it has incorporated the products into its regular racks, but hasn’t taken them out of inventory.
Nordstrom, as it happens, has been openly critical of Trump’s immigrant travel ban. The company’s three co-presidents — brothers Blake, Peter and Erik Nordstrom — issued a memo to employees observing that their company was founded by an immigrant, their great-grandfather John W. Nordstrom, and that today it employs thousands of first- and second-generation immigrants.
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UPDATES:
12:58 p.m.: This post has been updated with a more complete quote from Trump spokesman Sean Spicer.
1:46 p.m.: This post has been updated with Nordstrom’s closing stock price.
3:08 p.m.: This post has been updated to clarify T.J. Maxx’s marketing of Ivanka merchandise.
