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Nordstrom's 'Unfair' Strategy Against Trump? Remembering Their Extremely Loyal Customers

On Thursday, shares of department store Nordstrom Inc. JWN are on the rise, up around 3.2% in late morning trading as it continues the gains it saw yesterday amid a tweet blast from none other than President Trump himself.

My daughter Ivanka has been treated so unfairly by @Nordstrom . She is a great person -- always pushing me to do the right thing! Terrible!- Donald J. Trump (@realDonaldTrump) February 8, 2017

The president called out Nordstrom on Twitter TWTR Wednesday morning, criticizing the retailer's decision to stop selling his daughter Ivanka Trump's brand in its stores.

But unlike what happened to Lockheed Martin LMT , when President Trump slammed the defense giant's "tremendous cost" of its fighter jets, or General Motors GM , when he condemned the automaker for assembling cars in Mexico, or Toyota TM for building a new Mexican auto plant, where each company's stock slid as a result of the president's tweets, JWN did the opposite. While the stock did, at first, take a quick dive, it quickly recovered, and by market close on Wednesday, shares of Nordstrom were up over 4%.

Now, one can rightfully argue that you can't really compare Lockheed Martin, General Motors, and Toyota with Nordstrom, since they each operate in distinct and separate industries from one another. The former are companies for whom the federal government supplies large amounts of revenues through contracts, or companies that are directly affected by President Trump's policies.

Nordstrom, however, is consumer-facing, and doesn't need favorable government policy or contracts to help support their business structure or boost their bottom line. It would take a lot more than a tweet to get consumers to turn away from brands they're loyal to, and Nordstrom has a huge devoted consumer base.

Last week, Nordstrom originally made the announcement to drop the Ivanka Trump brand because of waning sales performance. "To reiterate what we've already shared when asked, we made this decision based on performance," a Nordstrom spokeswoman said . "Over the past year, and particularly in the last half of 2016, sales of the brand have steadily declined to the point where it didn't make good business sense for us to continue with the line for now."

The Seattle-based retailer isn't the only one to dump the Ivanka Trump brand. High-end department store Neiman Marcus now no longer sells her jewelry line; Shoes.com ditched the brand's shoe line back in November, citing poor sales; Belk, a Southern department store chain, recently stopped selling Ivanka Trump shoes and handbags; Walmart's WMT Jet.com quietly pulled both Ivanka Trump and Donald Trump-branded apparel and perfume, according to Mic ; e-commerce sites ShopStyle and Gilt no longer carry the brand; and even TJ Maxx TJXinstructed all employees at its namesake and Marshalls stores to trash all signs advertising Ivanka Trump's fashion line.

But don't worry Ivanka: Kellyanne Conway has your brand's back .

Actually, A 'Fair' Win

Much to the likely dismay of the president, Nordstrom began trending on Twitter, with people rallying behind the Seattle-based department store.

Have I mentioned recently that @Nordstrom is one of my favorite department stories. Must shop there more, starting, you know, today.- Deborah Blum (@deborahblum) February 8, 2017

I didn't NEED an excuse to shop at Nordstrom but...- Ana Marie Cox (@anamariecox) February 8, 2017

I guess I now exclusively shop at Nordstrom- sonia saraiya (@soniasaraiya) February 8, 2017

For anyone who knows retail or fashion, then they know that politics matter in these industries. Just think back to how much discussion there was about who was dressing First Lady Melania Trump at the inauguration, and when it was discovered it was Ralph Lauren RL , people were outraged. Think back to how many designers have refused to even dress the First Lady at all because of who her husband is.

But for Nordstrom, it's safe to say Trump's tweet not only cemented their already strong consumer base, but will likely draw new customers into its stores in a time where brick-and-mortar retailers desperately need it. All in all, Nordstrom fairly won this ridiculous war of words it was drug in to, and it didn't even have to do anything. Its customers and investors stood strong, suggesting President Trump's tweets are not as earth-shattering as they used to be.

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Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Toyota Motor Corp Ltd Ord (TM): Free Stock Analysis Report

Nordstrom, Inc. (JWN): Free Stock Analysis Report

Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report

TJX Companies, Inc. (The) (TJX): Free Stock Analysis Report

Ralph Lauren Corporation (RL): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Twitter, Inc. (TWTR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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