Trump's 'golden' image on trial after bankruptcy
NEW YORK |
NEW YORK (Reuters) - Trump Entertainment Resorts' TRMP.O bankruptcy filing is only the latest disappointment to attach itself to the Trump name, once a byword for luxury and high living.
Donald Trump, the real estate mogul who has splashed his name on everything from skyscrapers to neckties to bottled water, has suffered a string of recent reversals that threaten to dilute his cachet, say branding experts. His name, which he often licenses to real estate projects in which he has no direct control, has earned him millions.
"His brand is associated with success and making money. And every time the word bankruptcy appears next to Trump, that's not good," said Allen Adamson, managing director of Landor, a brand consultancy. "He can take a few chinks in the armour, but I think he's probably at the limit."
Famous for shouting "You're fired!" at the contestants who aspired to his tycoon status and lavish lifestyle on "The Apprentice," his long-running reality TV series, Trump would never fire himself. But image watchers will be looking for signs he may have lost some of his lustre, as the latest season of his show premieres on March 1.
Deutsche Bank Trust Co Americas, a unit of Deutsche Bank (DBKGn.DE), is suing Trump for $40 million (28.3 million pounds), the personal guarantee he pledged as security on a $640 million construction loan for the Trump International Hotel & Tower, according to lawsuits filed in New York Supreme Court in Queens.
He defaulted in November, arguing he should not have to pay over $330 million he owes because the world economic crisis constitutes a "Force Majeure" -- equating it with war or an act of God.
He also seeks $3 billion in damages, according to court documents.
Becoming "president" of the development was the prize awarded to Bill Rancic, The Apprentice's first winner.
In Dubai, Nakheel, the property arm of Dubai Holdings, has postponed work on Trump International Tower and Hotel.
Similarly, Florida developers decided not to proceed with a Trump-branded project even after they paid $2.84 million plus half the net sales to put his name on it, according to court documents filed in U.S. District Court in Tampa.
Another risk Trump runs is the clash between his reputation for luxury and living large and the tough economic times, which calls for understatement, Adamson said.
Trump's merchandise, as advertised on his website, is far from understated.
"Dress for success," reads the text touting his men's suits. "Made from luxurious fabrics with elegant details including silk lining and gold piping on the interior, the collection exudes confidence and high-end style."
That tone sounds a false note today, Adamson said, because the trumpeting of big spending is out of fashion.
"That whole lifestyle is under scrutiny now," he said. "Trump has never stood for less is more. That's the bigger challenge to the Trump brand."
On the other hand, failure might not tarnish Trump's image as much as it might seem, said Scott Davis, a partner at Prophet, a branding firm.
Trump has some wiggle room because his story exalts the comeback, not just uninterrupted success. Davis said.
Trump Entertainment's Chapter 11 filing, for example, marks the third plunge into bankruptcy for the company.
"He's the guy who bounces back," Davis said. "He epitomizes a part of the American dream that people latch onto. He's somebody that has come through contentious times and he ends up back on top."
So far, at least some of Trump's associates and license holders are standing by him, opting to try to distance the man from the bankrupt gambling business that bears his name.
"NBC is not going to comment on Trump's personal business," said Amanda Ruisi, the show's NBC spokeswoman.
Drinks America, which markets Trump-brand vodka, pointed out that Trump Entertainment represents little of Trump's net worth.
But the next installment of The Apprentice will present a challenge, given the contrast between his display of business acumen and the ongoing bankruptcy, Davis said.
Those who do watch might be seeking a pleasure that evokes an easier yesteryear, Adamson said. "Either they're going to watch it for a nostalgic look back, or as an escape from the misery of watching CNBC."
(Editing by Patrick Fitzgibbons and Andre Grenon)
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