• by Sarah Mahoney  @mahoney_sarah, June 30, 2015

Will Macy’s ditch the Donald? So far, while presidential candidate Donald Trump’s incendiary words about Mexico have gotten him axed by NBC, Univision, Televisa and Ora TV, Macy’s is keeping mum about its controversial relationship with the business mogul. And while some observers are dismissing the uproar as just one more Trump-triggered brouhaha, it comes at a time when Macy’s is struggling to both build sales momentum and strengthen its ties to Latino shoppers.

In recent years, the Cincinnati-based retailer has poured considerable cash into wooing Latinas, including the launch of Thalia, its clothing line with Mexican superstar Thalia Sodi. (It reportedly even resized its store mannequins for the launch, based on body scan data, to make clothes look more appealing to Hispanic women.) And it’s well aware that its competition, including Target, Kohl’s and JCPenney, are making a fierce play for those shoppers as well.

“Macy’s can’t have it both ways,” Arturo Carmona, executive director of Presente.org, tells Marketing Daily: “The company can’t fund this kind of toxic discrimination and still expect Hispanic shoppers to do business there. Trump’s discrimination has real consequences for Hispanic families.”

He thinks, based on the angry responses in social media, that Hispanic shoppers will vote with their feet if Macy’s doesn’t change course. “It’s been really interesting to see the anger, energy and unity -- from people with all Latino backgrounds, not just Mexican -- behind this unprecedented attack.” (Trump referred to Mexicans ‘as “rapists and murderers.”) “They know 2016 will be a historic year for the Latino vote,” he says -- and he expects that awareness to translate to shopping behavior as well.

Presente.org -- the largest online Latino organization in the U.S. with some 300,000 members -- is calling for Macy’s to end its relationship with Trump, who is a spokesperson for menswear and fragrances, and appears in the company’s ad campaigns. And MoveOn.org, the left-leaning organization that tried to use a “Dump Trump” campaign to ditch the Donald back in 2012, following racially charged election comments, has collected more than 700,000 on signatures.

Macy’s also has the sensibilities of its own workforce to worry about. Fortune reports that Macy’s diversity numbers are head-and-shoulders above industry averages, with minorities representing 60% of its overall workforce, and 35% of its management team.

Macy’s, which did not respond to queries, is facing other problems. Deutsche Bank downgraded the company to a sell, “to reflect low confidence that the company can bust out of its same-store sales rut.” In his report, analyst Paul Trussell warns that continued headwinds from a decline in tourist spending in the U.S., and problems at key vendors, such as Michael Kors, are problematic. And he says Macy’s seems to faring worse than others. “We are concerned that the company is losing share to revitalized competitors.”

He is also concerned that Macy’s is vulnerable to big shifts in the way that Americans are spending their discretionary dollars. “While activewear remains a bright spot for “stuff” vs. experiences and Macy’s has increased its exposure through Finish Line shop-in-shops, demand for the categories of items that Macy’s sells has generally waned,” he writes. “According to the Bureau of Labor Statistics, women’s apparel sales are down 17.7% since 2007, and household textiles are down 26.5%. We are also mindful of consumer dollars increasingly going toward healthcare and education, leaving a smaller wallet available for discretionary spend.”