Target never sold transgender bathing suits for children, but staff members were threatened by angry customers after the retailer promoted LGBT products during Pride Month, Target CEO Brian Cornell said in a recent interview.
At the store level, he said there were “lots of threats, products being destroyed, [and] point of sale being disrupted.” Some people were “yelling at them [staff]; they threatened to light products on fire in the store. So very aggressive behavior.”
At the time, Target claimed that the decision to remove the products was taken because of the “threats impacting our team members’ sense of safety and well-being.”
In his CNBC interview, Mr. Cornell pointed out that Target has been “celebrating heritage moments like Pride for over a decade now.”
“We’ve never seen that kind of response,” he said.
Mr. Cornell said that even though he “knew personally” that the products were “not going to be well received,” the order to take them down was done to “prioritize the safety of the team.” He acknowledged changing the location of the products following the reaction.
When the host asked the executive about the “transgender bathing suits” being sold to kids at the stores and the issue of the company working with a designer known to be a “devil worshiper,” Mr. Cornell flatly refuted these claims.
“Well, I think you and I both know those weren’t true,” he said.
Mr. Cornell’s dismissal of the claims was met with instant criticism online.
Mr. Hild posted a video of a Target customer at the store’s kids section showing LGBT clothing and books for sale.
A tag on a kids’ dress read—“Thoughtfully fit on multiple body types and gender expressions.” Another clothing tag said—“pride toddler legging.” One piece of clothing had a tag saying “tuck-friendly construction.”
Two books being sold in the kids section were titled “Glad You Came Out!” and “I’m So Happy That You’re Queer!”
There were two items from Abprallen in the Pride collection. However, the products were removed from Target’s online store following the controversy.
Limping Performance
Since the backlash began in May, Target’s financial performance has been affected. Between May 1 and Nov. 2, the company’s stock price slipped to $111.07, a decline of close to 30 percent, and its market capitalization decreased to $51.27 billion from $72.53 billion.The company posted second-quarter revenue of $24.77 billion, which was a decline from $25.32 billion in the first quarter; the results were off by 4.85 percent from the year-earlier period, the first such decline since 2019.
Target will release its third-quarter results on Nov. 15.
In June, KeyBanc Capital market analyst Bradley Thomas said in a note that Target could face headwinds for up to a year and a half.
“While we still believe in the LT [long-term] margin recovery story, we downgrade TGT (Target) to SW (sector weight), given increasing consumer headwinds over the next 12-18 months,” the note reads, according to MarketWatch.
“Given the recent selloff in shares, we believe NT [near-term] downside may be limited, but we see the growing risk of student loan payments as likely pushing out the margin recovery story at least another year, thus pushing us to downgrade.”
The retailer has announced multiple store closures this year. In March, Target stated that it would close four stores in May—one each in Maryland, Virginia, Minnesota, and Pennsylvania. The company cited declines in foot traffic for the closures.
In September, Target announced that nine stores in four states would be closing because of concerns about retail crime and business performance—one in New York, two in Seattle, three in Portland, Oregan, and three in California.
Target is taking a “much more conservative approach” for the holiday season while planning its inventory, Mr. Cornell said in his CNBC interview.
Last year, Target struggled with too much inventory during the holiday season. And in the year before, the company didn’t have enough merchandise, resulting from supply chain issues triggered by the COVID-19 pandemic.
