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All Contents © 2017The Kiplinger Washington Editors
By Laura Hoy
| April 2017
Dabbling in politics is risky business on Wall Street. With U.S. political parties more divided than ever, companies need to be careful what messages they send because no matter which side they take, they risk alienating half of the population.
In some cases, taking a stand can be beneficial — take Apple Inc.’s (AAPL) decision to stand up to the FBI and refuse to crack open one of its iPhones. The issue was divisive, but demonstrated the firm’s commitment to customers’ privacy — something those on both sides of the aisle value.
However, in other situations, like Target Corporation’s (TGT) decision to make its bathroom policies a public debate, it can result in a loss of customers. While most big-name companies tend to keep their names well away from any kind of political debate, some firms find themselves caught up in politics whether they mean to or not.
Here is a look at four stocks that have waded into some murky political waters.
Prices and data are from the original InvestorPlace story published on April 5, 2017. Click on ticker-symbol links in each slide for current prices and more.
This slide show is from InvestorPlace, not the Kiplinger editorial staff.
Mike Mozart via Flickr
It has been a rough few months for home-goods retailer Bed Bath & Beyond Inc. (BBBY). The stock has fallen more than 13% over the past six months as the company struggles to keep up with the ever-growing e-commerce market. Foot traffic has consistently slowed at BBBY’s stores, and the firm’s efforts to up its online presence have had only a small positive impact.
Now, the store has found itself in between a rock and a hard place with Donald Trump in the White House. With many people boycotting Trump-brand products, BBBY had to decide whether or not to continue stocking Ivanka Trump diaper bags and Trump-brand lighting fixtures. Late last month, BBBY stopped selling those items — suggesting that the company has given in to boycotters who refused to shop at the store while it sold Trump-brand items. However, Bed, Bath & Beyond could also face backlash from Trump supporters, who may be angry that it has caved.
In any case, a loss of customers from either side of the political aisle is not what BBBY stock needs right now, and the firm will likely be hoping news of the dropped Trump products will fly under the radar.
4028mdk09 via Wikipedia
Premium coffeeshop chain Starbucks Corporation (SBUX) is no stranger to controversy. The firm is constantly making social and political statements that sometimes bring positive attention to the brand and other times land ex-CEO (now executive chairman) Howard Schultz in hot water.
The brand’s latest political gesture was to get involved in the immigration and refugee debate that has divided the nation. Schultz responded to Trump’s call to stop admitting refugees to the States by vowing to hire 10,000 refugees over the course of the next five years. His promise was praised by many, but also criticized by those who claimed that American job creation should take priority.
Starbucks certainly can’t afford to lose half of its customer base, but the Seattle-based chain is also concerned about anti-American sentiment that has been growing in other parts of the world.
Not only is SBUX synonymous with the USA, but the firm has a reputation for being inclusive and progressive. So although it has ruffled more than a few feathers, its stand against Trump’s policies should come as no surprise.
lovelanyandoo.com via Flickr
Another hot-button issue in the U.S. has been transgender bathroom rights. The debate on which bathrooms transgender individuals should use and whether or not separate facilities are needed has been a polarizing issue that has left companies that take one side or another hurting. However Yelp Inc.’s (YELP) introduction of a transgender bathroom feature has allowed the firm to quietly support the transgender community without upsetting the other side.
Yelp now allows users to see if restaurants and other businesses offer a gender-neutral bathroom. The move was certainly a political one — Yelp head of diversity and inclusion Rachel William has said as much in interviews on the topic. By allowing people to search for gender-neutral bathrooms, Yelp is urging businesses to offer such a facility in order to gain customers, as not having one might mean they are omitted from some users’ searches.
This quiet but strong stance is exactly the kind of political maneuver needed on such a sensitive topic, and in turn, YELP has faced very little backlash over the addition of the new feature.
Ras / Juha Makkonen via Wikimedia
The current political climate is a difficult one for retailers. One misstep and someone will boycott, celebrities will speak out and sponsors can even turn their backs. That has been the case for athletic apparel makers like Under Armour Inc. (UAA), but Nike Inc. (NKE) has been able to take a stand without facing a massive backlash.
Over the past few months, NKE has been using its brand message of self-empowerment to promote inclusion and human rights without overtly disagreeing with the current administration. That means the brand is able to speak to those who vehemently oppose Trump’s policies without offending those who back him up.
Nike has also created a sports Hijab that will serve Muslim women who want to compete but lack activewear that fits in with their beliefs. The move is a good one both politically and from a business perspective because it not only underscores NKE’s inclusive stance, but it could also open up an athleisure market for Middle Eastern women.
This article is by Laura Hoy of InvestorPlace. As of this writing, she was long SBUX.
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