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What Eric Trump has to say about the Trump family business failures

July 12,2016 06:16

The Trump Organization has built up a reputation for its luxury real estate properties throughout the world. More recently, Donald Trump's name has also become associated with discontinued operations — including Trump Steaks, Trump Magazine and Trump ...and more »



The Trump Organization has built up a reputation for its luxury real estate properties throughout the world. More recently, Donald Trump’s name has also become associated with discontinued operations — including Trump Steaks, Trump Magazine and Trump Airlines. Eric Trump, son of the presumptive Republican presidential candidate, sat down with Yahoo Finance in Trump Tower last week to talk about the family’s business and its future prospects. The younger Trump, who at age 32 serves as executive vice president of the company along with his siblings Ivanka and Don Jr., shrugged off the businesses that haven’t succeeded. “How about 400 that did well?” he said. “They’re not exactly a big part of our business. And they were fine. Not even something anybody ever focused on.” Instead, Eric Trump emphasized the company’s real estate portfolio. “Listen, our focus is building the best hotels in the world. That’s what we do,” he said. “We have the best residential buildings in the world, the best commercial buildings in the world. We have some of the best retail in the world. That’s our core business, that’s what I do every day, that’s what we do every day. That’s what we’re passionate about.” Donald Trump’s rival for the presidency, though, has tried to use his business record against him, with Hillary Clinton even visiting Atlantic City last week to criticize his bankrupt casinos. Indeed, Donald Trump’s Atlantic City legacy includes four rounds of bankruptcies. And, according to financial records examined by The Wall Street Journal, those casinos received limited capital investment. “We all know what happened in Atlantic City,” Eric Trump told Yahoo Finance, referring to the New Jersey city’s financial problems. “It was very sad.” He emphasized the fact that Las Vegas, another city known for gambling, has continued to diversify. “If you look at Vegas right now, only about 30% of their revenue is gaming-derived. While 70% of the revenue in Las Vegas is ancillary … If you look at Atlantic City, about 75% of the revenue is gaming-derived … They never diversified, they never built the airports, they never built a train that went in there.” “There isn’t a casino in Atlantic City that’s not bankrupt,” Eric Trump said. While other casinos have had their troubles, Trump’s gambling operations appear to have fared particularly poorly. Trump Entertainment Resorts went public in the mid-1990s and lost 93% of its value over the next decade. Meanwhile, an index of casino stocks that had diversified operations, including Penn National Gaming (PENN), was up over 250% during that period. Trump University —a now-defunct for-profit operation that provided real-estate training courses — has also received a large degree of criticism.  Three pending lawsuits accuse Trump U of illegal practices that range from false claims to racketeering, but Eric Trump asserts that former students had a positive experience. “I’m standing by the fact that we had 98% rating. I mean, we had a very good rating for that business model,” he said. “And, I mean, people rated it very highly.” Still, former Trump University students have spoken out to say they were coerced into giving the university positive reviews. Former employees and students have also accused the university of using aggressive sales tactics, including encouraging or pressuring prospective students to rack up credit card debt to pay for the program. But Eric Trump noted, “People make financial decisions of their own. You could build up debt buying a house. I mean, it’s people make financial decisions of their own, and I think they have to stand by that.” Regardless of the tactics the university used, it’s hard to call the business a success since it essentially stopped operating in 2010. The bottom line may be this: Donald Trump’s branding success may be unparalleled, but when he has wavered from his core competency — to casinos, education and ancillary businesses like steaks — he has hit considerable roadblocks. For more on Yahoo Finance’s interview with Eric Trump, see here: Donald Trump’s son on the impact of the election on the family business Eric Trump: My dad’s VP should make for a great COO  

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