The truth about the Trump business

The newly elected president of the United States, the 69-year-old billionaire, is panicking in America. While saying he was “close to the Democrats” ten years ago, he is now described by the “New Yorker” as “the American version of Marine Le Pen”. His thunderous outbursts against “rape criminals” Mexicans, Muslims to be prevented from entering the United States or “sweeping” car manufacturers spinning abroad do not seem to hurt him, on the contrary.

It is because he is extremely wealthy and fully funded his campaign that this extraordinary Republican can say what he thinks. “Neither the banks nor the multinationals can control me,” launched during the presidential campaign that made fun of its opponents, forcing them to a millimeter of communication in order not to offend any sponsor. Trump is not a politician like the others. His trademark is permanent aggression, extravagance and a resolute aggressive style based on one certainty: Whatever the end result, his campaign will strengthen his image and that is good for his business. Immerse yourself in the heart of Donald Trump’s empire and fortune.

Before arriving at the Most Holy, first, greet the doorman in the butterfly at the Trump Tower at 725 5th Avenue in New York, walk along the 20-foot-high (seven-story-high) indoor waterfall, take a somewhat dark elevator, and encounter a series of assistants. In his office sits Donald J. Trump, president of the Trump organization, smiling with pictures of him right, left, in front and behind him. A rifle, which was recently unveiled to this great supporter of the freedom to bear arms for all American citizens, hangs on the wall.

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Trump Tower © Best picture USA

When asked which leader he draws inspiration from to run his company, he formulates a single syllable: “Me.” Does he admire another cador in the industry? “I do not like the verb to admire,” he replies. Trump is not exactly a self-made man – he has inherited a considerable fortune from his father – but he is certainly a “self-invented” guy. We had never seen anyone turn into a presidential campaign megastar without preparation, without political experience, without a gram of good manners. To browse the Trump universe, to meet his partners, is to discover that the king of New York developers has long since ceased to be a real estate developer in Manhattan, and that this hotel owner, who is present all over the world, has hardly any of its establishments abroad.

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Trump sells out to America as the king of builders and the wisest of leaders. In reality, it is none of that. He has built few buildings since the turn of the century and researched many projects that came to nothing. That does not mean he is a fraud. Let’s just say he’s primarily a property owner and a golf club owner, and his business career is even more astonishing than his attack on the White House. Trump took off in the 1980s by borrowing a lot of money, he survived the disasters of the early 1990s that almost wiped him out, and then changed his business model. A new empire is born on the rubble of the old. His business is still booming, it just does not look like he claims.

During the 1980s, he was practically on steroids. He bought an airline, an expansive property in Palm Beach, and a yacht so large that it inspired a song by the band Queen. He became Atlantic City’s tycoon with his Trump Taj Mahal, the most expensive casino ever built in the world. He bought two skyscrapers at Central Park, which he called Trump Park Avenue and Trump Parc East, and bought the Plaza Hotel for $ 400 million, fully borrowed. At the time, Trump still had to guarantee a quarter of that on his personal fortune. He then trumpeted that he would give his wife, Ivana, $ 1 “and all the dresses she wanted” if she agreed to run the hotel.

This waste borrowed so much that he ended up personally guaranteeing close to 1 billion. Suffice it to say that the banks could easily have ruined it if something had gone wrong. In 1990, the inauguration of the Taj Mahal was the apotheosis of this bling bling era. But the curtain fell a little over a year later when the grand establishment went bankrupt.

Ahead of this year’s presidential election, Donald Trump’s only real success was to stay on his feet as the economy crumbled under his feet. He lost everything: the Plaza, the yacht, the airline, while his casinos sought bankruptcy protection. What saved him was that his bankers considered him worth more with his head above water than sunk. He bought time until the real estate market picked up speed again. And in 1995, part of his debt was written off, and some projects bearing his name were launched, he started again. By favoring licenses over loans secured by its assets.

Today Trump Empire is not as gigantic as its owner would have you believe. Last year, it achieved a turnover of $ 605 million, which is comparable to that recorded by the NN company, Johnson City, which manufactures small steel balls, and which, of course, you have never heard of. But the profit on that revenue is between $ 275 and $ 325 million. An extraordinary margin, thirteen times higher than that of the Johnson City company. How is it possible ? “These are the licenses,” explains the CFO, “a very profitable business,” while weighing less than its other activities, real estate and golf clubs.

For it is by relinquishing its name to the owners of new towers in the Philippines, Panama, India, Uruguay, Brazil, Canada and the United States that Trump is releasing millions of dollars. And he no longer has to worry about spending too much money on concrete. His name on a building no longer necessarily means that he owns it or that he built it. Take the Trump International Hotel & Tower, which stands in place of the Gulf + Western Building at Columbus Circle: it was General Electric that injected the money to carry out the operation, but a GE International Hotel would never have attracted as crowded as a Trump Hotel. “It’s not traditional real estate anymore, but it’s still real estate, notes Richard LeFrak, another billionaire. In fact, if you look closely, his name has become a brand, and that’s what his real wallet is.”

Pros: this last name seems to boost all businesses. In 2005, he put it on a bottle of vodka, immediately dubbed “the best premium vodka in the world”. There is also a Trump tea, a Trump energy drink for the Israeli and Palestinian markets, and Trump perfumes, called Success and Empire. He also launched a Trump collection of menswear sold on Macy’s and Trump memory foam mattresses. These contracts each brought him between $ 1 and $ 5 million last year, according to the information he officially provided as part of his campaign. But the latter two companies cut ties when Trump during his candidacy speech in June last year called Mexican immigrants “drug dealers and rapists.” A projection that cost him sponsors, but which threw him very high into the Republican stratosphere.

This business genius had even more success with his show, “The Apprentice,” on NBC, which would have brought him $ 200 million in fourteen years. But his other real business is golf courses. Welcome to the Trump National Golf Club in Bedminster: a tribute to the Trump style. Unmatchable: At the entrance to the clubhouse you can see a fountain with statues of lions around a pool, then a little higher up other lions near other pools … A huge sculpture appears to guard over Lamborghini, Maserati and Bentley parked in the driveway. It was Trump who came up with this crazy decoration. It’s hard to imagine what his leadership style would look like when applied to government, where hierarchies are impenetrable, micro-governance ineffective, and procurement of overly expensive statues subject to congressional control.

This club has 400 members, who each pay $ 24,000 a year after losing about $ 150,000 in registration fees. He is expected to make a profit of $ 5 million this year. It is, of course, a dream place. Trump has also suggested he could be buried at the foot of the first hole of the course before specifying that there would be room for 548 extra graves for wealthy amateurs. Our mogul owns a dozen other equally elite clubs in the US, two in Scotland, one in Ireland, and he is preparing to sell a license to Dubai.

He is convinced that this business can become even more profitable. “One thing you have to realize is that a golf course is first and foremost a space that you can build thousands of villas on. No one seems to realize that,” he says. Meanwhile, the bulk of his fortune remains his real estate and office portfolio, including the Trump Tower, the NikeTown Store and also sophisticated tourist complexes like the Trump National Doral in Miami. And the new Republican champion is furious to see his fortune valued at $ 4.5 billion in the latest “Forbes” rankings: he considers it to be at least twice as important.

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This does not mean that his statements should be taken at face value. In 1999, 2004, 2007, he repeatedly told the cameras that he was “New York’s greatest promoter”. Last May, during a speech in South Carolina about his project for the border with Mexico, he reassured: “I am the greatest builder in New York, and I want to build the greatest wall on the border that anyone can imagine.” Remarks received by a delirious crowd. Trump is not New York’s greatest builder. And he has not been for a long time. But he has enough genius to appear far more powerful than he is, to crush the competition. That’s how he distanced himself from the other Republican candidates by presenting himself as the “most gifted businessman to ever wear a suit.”

A WHOLE RANGE OF PRODUCTS IN HIS NAME

Trump glasses

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At $ 93.30 each, they are not just aimed at billionaires.

Trump perfume

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It’s called Empire and sells for $ 62 per bottle.

Trump suit

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Distributed at Macy’s, they are ultra-classic and cost $ 279.99.

Trump Vodka

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Sold for $ 39.99, “the best vodka in the world” did not survive three years.

Pictures © screenshot

By Max Abelson for “Bloomberg Businessweek” ©
Translated and edited by Patrick Chabert

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