According to former Target executive Gerald Storch, the retailer’s biggest mistake amid the ongoing boycott of its stores has been its decision to sell “tuck-friendly” swimwear.
“‘I’ve never seen a case for one item — that tucked swimsuit — that’s really what made the difference versus the competitors. That’s where the big mistake was made,” Storch said Saturday on Fox News’ “Fox & Friends Weekend.”
He added that other retailers carried colored plates and gingerbread houses and that was fine because “who cares — everybody carries that stuff.”
Listen to his full remarks below:
The remarks come amid an ongoing boycott of Target over its abundance of “Pride” clothing and gear marketed towards children.
They also come amid Target’s stock continuing to tank — so much so that the company’s stock has been downgraded.
“Target Corp.’s stock, which is on its longest losing streak in 23 years, was downgraded to neutral from overweight Thursday by JPMorgan, which cited ‘too many concerns rising’ in relation to the retail giant,” according to MarketWatch.
NEW — JPMorgan Downgrades Target’s Stock Citing ‘Too Many Concerns Rising’
“Target Corp.’s stock, which is on its longest losing streak in 23 years, was downgraded to neutral from overweight Thursday by JPMorgan, which cited ‘too many concerns rising’ in relation to the retail… pic.twitter.com/JRBKMKvUlk
— Chief Nerd (@TheChiefNerd) June 1, 2023
That said, Storch stressed during the interview that there have been other reasons for Target’s recent decline besides the boycott.
“While there’s no doubt the boycott is part of the problem, if you read the analyst reports about Target during this period … they’re more concerned with the fundamental business issues,” he said.
What fundamental business issues? A May 17th earnings report that was bad, for example.
“Target’s decline in stock actually began on May 18th. That’s the day Walmart reported a seven percent gain in comp store sales. On the prior day, Target had reported flat sales. Flat at Target, up seven at Wal-Mart. There’s no way that comparison looks good,” Storch said.
“The consumer is feeling very stressed, very stressed by the environment, by inflation, and Target is known as the upscale discounter. So it’s not good to be the upscale discounter at a time when the consumer doesn’t have a lot of money to spend. So they’re migrating more to Wal-Mart, and that’s a huge problem,” he added.
He’s not the only one who’s suggested the earnings report may have played a bigger role than the boycott in Target’s demise.
“[O]ne market analyst [said] that the recent backlash had precipitated a ‘probably negligible’ effect on investor sentiments, with the most likely cause of the stock sell-off being a first quarter earnings report on May 17 which announced flat sales and a gloomy forecast for the rest of 2023,” according to Newsweek.
“Jeremy Bowman, a contributing analyst at The Motley Fool, an investment advice firm, suggested that the latest results showed Target’s coronavirus pandemic boom was over, and its valuation was being readjusted to its new sales expectations,” Newsweek reported last week.
“Often, there’s these short-term things that the market tends to ignore. As an example, on January 6 , the day of the Capitol riots, the stock market actually rose that day, which I think is pretty surprising, even to me. The market generally looks past these social unrests or social/political issues if there isn’t really a specific economic angle,” Bowman said in his own words.
As for Target’s strategy — appeasement by removing the offending items — Bowman warned that it could backfire by alienating both sides of the debate.
“Bowman noted that the backlash the company had received over the LGBTQ+ pride range ‘doesn’t make Target look that good,’ and it seemed by withdrawing certain items ‘they’re maybe offending both sides of the political spectrum,’ which was a position ‘ don’t think any company wants to be in,” Newsweek notes.
He had a valid point.
— BPR based (@DumpstrFireNews) June 3, 2023
Speaking with Reuters this week, Erik Carnell, a designer whose controversial work was pulled from Target amid the boycott, slammed Target for appeasing those opposed to its “Pride” gear.
“It’s a very dangerous precedent to set, that if people just get riled up enough about the products that you’re selling, you can completely distance yourself from the LGBT community, when and if it’s convenient,” Carnell said.
“If you’re going to take a stance and say that you care about the LGBT community, you need to stand by that regardless,” the designer added.
Target is essentially stuck between a rock and a hard please. It can either appease critics, many of whom are parents, or it can appease the LGBT community, which represents a minority of the population but has an outsized influence because of cultural factors.
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