Can Trump the Brand Survive Trump the Candidate?

Brands Have Bailed on Donald, yet His Own Empire Is Growing, for Now

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Donald Trump speaking to supporters in Mesa, Arizona in December 2015
Donald Trump speaking to supporters in Mesa, Arizona in December 2015 Credit: Gage Skidmore via Creative Commons
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Call it the tale of two Trumps: Donald Trump the presidential candidate is getting a lot of his support from blue-collar workers seduced by his message of making America great again. But Mr. Trump the businessman runs an empire of luxury hotels, golf courses and condos that many of his supporters could only dream of affording.

The Trump name, of course, has been slapped on more affordable things, from steaks to water, neckties to mattresses. But the average Joe might be hard-pressed to find a lot of those items. Trump branded steaks seem to have gone the way of the dodo. And in the wake of comments they found offensive, a number of high-profile brands working with him have departed over the past year, including Macy's, Nascar, Serta and Perfumania.

"The individual Trump has usurped the business, so now you can't look at a Trump brand without thinking of Trump the person, who can be volatile and unpredictable, which is not good for the brand," said Howard Pulchin, global director-creative strategy and community, APCO Worldwide.

Mr. Pulchin said Mr. Trump has done a good job at empathizing with groups of Americans, but he's also pushed away large sections of the population, which is dangerous for the brand's reputation when the man and businesses are linked so closely.

But what about the big-ticket items like golf and real estate?

Though it was careful to say it had nothing to do with politics, the PGA Tour announced this month that it was moving the World Golf Championship from the Trump-owned golf course in Miami that has hosted the event for the last 55 years. There's one of those silly online petitions demanding KitchenAid drop its sponsorship of a golf tournament held on a Trump course. And a lawsuit by former members of the former Ritz-Carlton Golf Club—now the Trump National Golf Club—could be heading to trial in Florida in August.

Despite all that, business is booming. Just ask Mr. Trump—his son Eric, that is. The younger Mr. Trump, who serves as exec VP-development and acquisitions for the privately held Trump Organization, told Ad Age that his father's campaign has "absolutely positively" affected business performance.

"From a macro level, he's probably the most talked about person on earth right now, and I don't say that lightly," said Eric Trump. "I don't think there's anyone who has gotten the exposure he's gotten."

The tremendous media coverage for the Republican candidate has helped strengthen Trump's brand. "The actual businesses are the most profitable they've ever been and our distribution channels are up," said Eric Trump.

He added that occupancy and performance of the hotels and golf courses are the best they've ever been, and the winery business did more online sales this January than all of 2015. According to a breakdown of hotels from the Trump Organization, the Trump National Doral Miami saw revenue jump $35 million year-over-year in 2015, and Trump Las Vegas' revenue per available room grew 6.1% in the last six months.

On the residential side, Trump Vancouver, expected to open this summer, is already completely presold, said the younger Mr. Trump. "You wouldn't be 100% sold out of all residential units at the highest price per square foot in the history of the city if you didn't have people who really appreciate and admire your brand."

Because the company does not publish public numbers, any outside accounting is hard to come by. Last month, the BBC reported that the Trump business empire has seen revenue increase by $190 million since Mr. Trump entered the presidential race.

CityRealty.com Research Director Gabby Warshawer said Trump condos in New York have seen a slight increase in sales from 26 units in the first quarter of 2015 to 30 this quarter. "Historically, the name and the brand was synonymous with a certain level of luxury, so buyers purchased in the building and probably still do because they knew they were getting certain amenities and a certain lifestyle, so the Trump name has worked in terms of branding," said Ms. Warshawer.

Gene Grabowski, partner at Washington, D.C.-based public affairs firm Kglobal, said it stands to reason that Trump's businesses are doing well monetarily even as he loses appeal among upper-middle-class groups because he's gaining support from people turning out to vote for him.

The question is, he said, will this other group making "$50,000 or $60,000, who may buy a Trump necktie every other year" have enough buying power to support the brand in the long run?

Mr. Grabowski made the point that Mr. Trump's actions are beyond divisive. "Even those who support him or may say something favorable would be cautious about letting people know they bought a Trump necktie or stayed at his hotel—it's not a popular thing to do right now," he said. Mr. Grabowski attended an event at a Trump property in Chicago, and while it was a success, because so many attendees complained about the venue, it's moving to a different locale next year.

"Politics can certainly be polarizing, but if you're a Trump fan, you're a Trump fan," said Eric Trump, adding that the business is about the best service, locations and products in the world.

Howard Opinsky, exec VP-corporate advisory practice leader at Hill & Knowlton Strategies, who served as a Republican campaign strategist for years, said the days of brands being void of a political voice are over.

"Whenever brands take a political stance, they tend to both turn away a number of potential customers that might otherwise want to work with them and attract a group of advocates," said Mr. Opinsky. He said businesses have to decide if they want to engage a broad audience or one with intensely loyal, like-minded people.

At this point, it's "virtually impossible" for any of the businesses to distance themselves from Mr. Trump's campaign, but Mr. Opinsky said he wouldn't advise them to anyway because "I don't know if anyone would buy it."