Donald Trump's brand takes a hit from sexual assault allegations and lewd video

In the tradition of P.T. Barnum, an earlier showman-turned-politician who is credited with saying there’s no such thing as bad publicity, Donald Trump may have thought he had nothing to lose in running for president.

Even a defeat might serve to raise his visibility and burnish a name brand that has become his most valuable asset. 

But while Trump’s unconventional campaign has brought him a lot of free publicity and newfound popularity bordering on reverence among his mostly white, conservative, working-class supporters, it also has turned off many Americans who now associate his name with racism, misogyny and bigotry. 

And there are increasing signs that the ugliest presidential race in modern history has tarnished the Trump name to such degree that it may jeopardize — or, at a minimum, alter — the future of his business enterprises.

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The New York real estate developer, known for his lavish lifestyle, messy divorces and abrasive quips on the TV reality show “The Apprentice,” has long been a figure whom people “love to hate,” according to the celebrity and brand-tracking firm Q Scores. 

That brash, in-your-face image was part of Trump’s carefully crafted persona that went hand in hand with his brand, which also became synonymous with a kind of gaudy, over-the-top luxury. Over the past decade, he parlayed that reputation into a variety of businesses, including steaks, wine, clothing, mortgages and the now-defunct Trump University, currently the target of a fraud lawsuit.

But recent revelations that Trump boasted about groping women by the genitals, followed by accusations from several women that he grabbed and kissed them against their will, have turned Trump’s brand challenge from something like the one largely overcome by Martha Stewart after her conviction in a stock-trading case to the scandal that swirled around Southern chef Paula Deen, who has struggled to recover after disclosures that she used racial epithets.

“He’s said a lot of outrageous things throughout the course of the campaign,” said Karen Tiber Leland, founder of Sterling Marketing Group, a branding and marketing firm. “People shrugged it off as, ‘That’s Donald — he’s not politically correct.’ ”

But the vulgar exchange caught on a hot microphone with TV host Billy Bush in 2005 and subsequent sexual assault and harassment allegations by a number of women are “so completely out of bound [that] most people aren’t saying, ‘Donald is just Donald.’ ” Leland said. “He pushed the envelope too far.”

It's hard to say with certainty whether Trump's businesses are hurting because his ventures are mostly private and do not release financial figures. His campaign and business managers declined to comment, as did the Trump Organization, the conglomerate based in New York.

In a deposition earlier this year, Trump said his businesses were largely unaffected by his campaign; and in one instance, at Florida’s Mar-a-Lago Club, he said bookings were up, possibly because of his campaign’s frequent use of the property for events.

But there is growing evidence from outside surveys, some more anecdotal than scientific, suggesting that his real estate holdings are suffering from the negative publicity surrounding his campaign and past behavior.

A survey of more than 1,500 people by Brand Keys — conducted shortly after the 2005 recording was made public but before the allegations against Trump from various women emerged — found that the perceived value of Trump’s brand in several businesses had dropped significantly.

In June, the added value associated with the Trump name in entertainment, for example, was 43%, the company found. As of Oct. 9, it had dropped by 13 percentage points. There were smaller but still noticeable drops in the value of Trump’s real estate and golf and country clubs as well.

Trump’s businesses and corporate partnerships already had taken a hit as companies and sponsors, including Macy’s, PGA Tour and Perfumania, sought to reduce or cut ties with the controversial political figure.

Restaurateurs José Andrés and Geoffrey Zakarian pulled out of Trump’s new Washington, D.C., hotel shortly after the candidate last year characterized some Mexican immigrants as drug dealers and rapists.

“When a business leader starts to take strong political stances, in general it hurts” the business, said David Reibstein, a professor of marketing at the Wharton School. 

Because Trump already was so well-recognized, “there’s more of a downside than upside” to all the publicity he is generating, Reibstein said. He likened Trump’s public glare to that of Leona Helmsley, the millionaire New York hotelier who was known for her arrogance, exacting standards and eventually, tax evasion: “This did not help her business, even though her name was in the news everywhere.”

Foursquare, a location-based app that can measure the movement of more than 50 million users, said that foot traffic to Trump hotels, casinos and golf courses, relative to competitors, was down 19% in September compared with September 2014, and off 21% in blue states.

That wouldn’t be surprising to people like Gene Grabowski, a public relations veteran in Washington who recently stayed at Trump’s hotel in Chicago to advise a trade group meeting there. Grabowski said the group decided not to go back partly because Trump is so “polarizing.” 

Dodgers first baseman Adrian Gonzalez, who is of Mexican heritage, refused to stay with his team at that same Chicago hotel earlier this year, saying he wanted to live by his values.

Karen Lewis, who works in Washington, D.C., recently went to visit Trump’s new hotel, located a few blocks from the White House. She was effusive.  

“It’s beautiful,” said Lewis, as she walked on the spacious, Spanish-marble-laden floor of the lobby this month. But even if she could afford it, Lewis said she wouldn’t feel comfortable sleeping there: “On principle, probably not. I wouldn’t want to support his financial interests.”

The property was vandalized earlier this month when someone spray-painted “Black lives matter” at the entrance.

Trump’s residential properties also appear to have lost some of their luster. Although brands are not so important for home purchases — location is the primary factor — condos attached with the Trump name last year enjoyed a 9% price premium over other comparable units, according to real estate firm Redfin. That since has evaporated, said Nela Richardson, Redfin’s chief economist.

“All this negative press, the negative reactions from people, it’s got to hurt his brand,” said Kevin Keller, a marketing expert at Dartmouth College. He said some would-be customers will avoid patronizing Trump’s business because of concerns about what other people may think.

“They don’t want to have to apologize for staying at a Trump hotel or buying a Trump brand. … And when you get into luxury,” he added, “image matters a lot.”

More worrisome for Trump is that after election day on Nov. 8, his name may be associated with something else: loser. “Part of his brand is this whole thing that he’s a winner,” Keller said, noting that was Trump’s line in contrasting himself with former presidential rival Jeb Bush, who dropped out of the race after Trump’s repeated taunts that he was energy-less and a loser.

If Trump ends up losing, Keller said, there’s no way he’s going to be able to talk his way out of that. “No matter how he tries to spin it, that’s got to hurt his brand because his whole persona is built around that.”

Henry Schafer, executive vice president at Q Scores, which tracked the familiarity and popularity of Trump before he entered the race, thinks the GOP presidential nominee could have limited the damage from bad publicity by apologizing quickly. But it’s too late for that now, Schafer said. Trump expressed regret for the 2005 recording, but many regarded it as a halfhearted apology. And he has flatly denied the allegations of sexual misconduct, accusing the women of lying to seek publicity or help Democratic rival Hillary Clinton, and in some cases, making disparaging comments about their appearance.

Still, experts say, American consumers tend to have short memories of such details. How Trump’s brand does in the long run may depend much more on the consistency and quality of his goods and services as people’s buying decisions are based firstly on the perceived value of their purchase.

Even if he loses, Trump still could capitalize on his run for the White House. For starters, he has a mailing list of millions of potential new customers. Granted, they aren’t his target demographics for his existing businesses. One of the ironies of Trump’s campaign is that his primary base of support comes from working-class whites and anti-establishment Republicans — largely different from the high-income customers who can afford his hotels, condos and golf clubs.

As such, Trump’s future business may well be geared more to middle-income consumers. “He’s become so polarizing as a personal brand, I don’t think he can go both ways,” said Leland, the marketing specialist.

Expect Trump to try to keep his name in the limelight. With his large, new following, he could end up hosting a talk show or even starting his own conservative television network, Leland said. “I don’t think he’s going away.”

don.lee@latimes.com

Follow me at @dleelatimes

 

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