Donald Trump’s 12 Biggest Business Failures Show That He Can’t Lead
Donald Trump has amassed most of his wealth through real estate dealings. Using the fortune he inherited from his father, Trump bought land when it was cheap, acted as a slumlord for years, and ultimately created a brand that allowed him to license his name to other developers.
While he has certainly created a vast network of real estate holdings, his failed businesses have proven that in terms of running a business, Donald Trump is just as clueless as the guy attempting to open a small business in small town America.
Here are 12 horrendous business failures Donald Trump has led. One of them was nothing more than a massive scam run by unqualified people who had no business “helping others” as they claimed.
Donald Trump took out a $245 million loan in 1988 and purchase Eastern Air Shuttle. He then proceeded to slap the TRUMP decal on all of the planes while adding gold bathroom fixtures on planes that flew between New York, Boston, and Washington, D.C.
It only took two years after he launched Trump Shuttle for the airline to shut down. In the end, the company couldn’t even make enough money to cover its $1 million monthly interest payment on the initial loan.
Donald Trump realized there was a market for bottled water and he wanted a slice of the action. He quickly launched Trump Ice which touted itself as “one of the purest natural spring waters bottled in the world.”
While his bottled water made a profit of $280,000, the rest of his beverage business failed miserably. Trump Fire was trademarked in 2004, but never made it to market. Trump trademarked the name Trump Power at the same time. Both drinks were categorized as “non-alcoholic beverages containing fruit juices… namely, carbonated beverages” on their trademark applications.
He also trademarked Trump’s American Pale Ale but that application was canceled in 2007.
Trump: The Game
In 1988, Trump teamed up with Milton Bradley to debut “Trump: The Game” which sold just 800,000 copies. That doesn’t sound bad but it needed to make 2 million sales in order to become profitable. When the game was pulled from shelves in 1990 Trump said it may have been “too complicated.”
Habro released a new toned down version in 2004 and it also failed to sell and was quickly scrapped.
The Atlantic City properties owned and operated by Donald Trump failed three times. The Trump Taj Mahal filed for protection in 1991 after going $3 billion in debt after just one year in business. He then filed again in 2004 with the Trump Taj Mahal and the Trump Marina and Trump Plaza casinos, which along with a riverboat casino in Indiana had a debt burden of some $1.8 billion.
Trump would later reorganize the businesses as Trump Entertainment Resorts Inc only to file against four years later after missing an interest payment on a $53.1 million bond.
Trump magazine launched in 2007 to replace Trump Style and Trump World. Trump said he wanted to “[cash] in on the booming advertising market for yachts and other high-end commodities.”
Trump’s timing was awful, particularly for a company that would be dependent on luxury advertising.
The magazine shut down by 2009, providing a pretty consistent cycle in which Trump companies close down within 2 years of starting their operations.
Proving that his real estate chops don’t really span the full spectrum of the real estate industry, Donald Trump declared in April 2006: “I think it’s a great time to start a mortgage company.”
He famously added: “The real estate market is going to be very strong for a long time to come.”
Less than one year later the bottom fell out of the market and his business did less than one-third of the $3 billion in business executives predicted it would capture in its first year.
Trump would later hire E.J. Ridings for the company’s CEO position; the company’s website boasted Ridings as having been a “top executive of one of Wall Street’s most prestigious investment banks,” but Money Magazine soon discovered that he actually had just six months of experience as a stockbroker before he went to work at a small mortgage company.
Trump Mortgage closed down in September 2007.
The company ended up owing a $298,274 judgment that it never paid to a former employee, nor the $3,555 it owed in unpaid taxes.
In 2007, Donald Trump announced what he called the “greatest steaks in the world.” In reality, the steaks were sub-par and the business closed almost as quickly as it opened.
CEO Jerry Levin told ThinkProgress it was “a bad business idea” right from the start.
“[W]e literally sold almost no steaks,” Levin said. “If we sold $50,000 of steaks grand total, I’d be surprised.”
Trump Steaks were on store shelves for just two months.
Here’s a commercial for the failed steaks.
GoTrump.com was targeted at luxury seeking customers who didn’t want to use Travelocity for all of their travel needs. The website launched in 2006 and quietly shut down in 2007.
The site was doomed before it even started with Henry Harteveldt of Forrester Research writing in the Washington Post that it was a “vanity site” that wouldn’t make much money.
The website now redirects to Donaldjtrump.com.
In 1990 Donald Trump registered the trademark for Trumpnet under the category of “corporate telephone communication services.”
This failure didn’t even need a business, within two years the trademark was abandoned and Trumpnet never actually existed.
Trump Tower Tampa
Not every skyscraper Donald Trump touches turns to gold. Take for example the Trump Tower in Tampa, Florida.
Rather than build the tower on his own, Trump simply sold his name to developers of the $300 million condo project. While he scored $2 million for use of his name, the tower’s developers collected down payments from individual buyers until the project failed to take off in 2008.
Buyers quickly sued Donald Trump for misleading them and he eventually settled, in some cases for as little as $11,115, with plaintiffs who had lost hundreds of thousands of dollars.
Trump University launched with the promise of turning everyday people into billionaire real estate tycoons. Tuition at the university cost $34,995 and included mentorships from “industry leaders,” most of whom had little to no experience in real estate.
It was later determined that Trump University was nothing more than a scam and Trump and his cohorts were sued in federal court and forced to return money to the school’s participants.
Trump Vodka used the tagline, “Success Distilled,” but that couldn’t be further from the truth. The product launched in 2006 and shut down after two years.
Trump said at the time of launch, “I fully expect the most called for cocktail in America to be the T&T or the Trump and Tonic.”
Trump, isn’t known for his vodka drinking so it makes sense that consumers never trusted the Trump Vodka brand name.
Donald Trump likes to tout his business skills, but in reality, this one-trick pony fails at almost every business venture he starts, often collecting big annual salaries before he defaults to his creditors.