Bud Light wasn’t the only company to face a boycott this year over LGBT issues. Target found itself mired in controversy as well over its massive, prominently displayed “pride” month sections that included items for children, products like “tuck friendly” swimwear, merchandise by a controversial designer behind “Satan respects pronouns” gear, and more. Amid boycotts, the company lost billions in market value and JPMorgan downgraded its outlook for Target’s stock, pointing to “too many concerns rising.”
Shark Tank’s Kevin O’Leary said the company’s “stunning collapse” due to the backlash would serve as a wake-up call to corporate America about what happens when businesses get “too far away from the primary mandate.” And while the market proved to punish Target, that may not be the company's only lesson.
According to former Trump senior adviser Stephen Miller, founder of the legal nonprofit, America First Legal is suing Target on behalf of an investor for violating the Securities Exchange Act.
In the suit, Brian Craig, who said he lost about half of his $28,000 investment in the company, points to Target's "divisive political and social goals," which led the company to lose billions.
“Defendants knew their ESG and DEI mandates were a double-edged sword that risked backlash,” according to the suit.
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In its 2022 and 2023 Proxy Statements, Target assured shareholders and investors that the Board was monitoring for social and political issues and risks arising from the company’s ESG and DEI mandates. However, management only cared whether its leftist “stakeholders” were satisfied, disregarding the possibility that its customers and shareholders might feel differently. Thus, in May 2023, Target embraced the radical transgender agenda with its children-and-family-themed “Pride” marketing and sales campaign – the corporation’s infamous “Pride” collection included clothing for young children with rainbow Mickey Mouse symbols, LGBT-themed bibs and onesies for babies, and “tuck-friendly” bathing suits for “transgender women.” This predictably caused more than a $12 billion collapse in share value, the largest stock price decline in over 20 years.
This is not the first time Target’s management has used shareholder funds to virtue signal to leftist extremists, heedless of the consequences for the corporation’s brand, customers, and shareholders. For example, after the North Carolina legislature adopted a law in 2016 to keep biological men out of bathrooms used by women and girls, Target released a “Pride Manifesto” and welcomed its employees and shoppers to use restrooms and fitting rooms “corresponding to their gender identities.” After a massive backlash, CEO Brian Cornell reportedly admitted to Target staff that “Target didn’t adequately assess the risk” and that “the ensuing backlash was self-inflicted,” but instead of apologizing, publicly defended the decision: “We took a stance, and we’re going to continue to embrace our belief of diversity and inclusion, just how important that is to our company.”
Also, Target’s management has adopted “supplier diversity” targets, including a majority of collections to be made by “LGBTQIA+ creators and brands” in 2022, and engaged in the odious and illegal practice of race-based hiring by adopting a plan to increase its “representation of Black team members across the Company by 20 percent.”
Target’s management has misled investors, assuring them that the corporation oversees social and political issues and risks to protect shareholders, when behind closed doors, it works for its extremist hard-left “stakeholders” at the expense of its customers and shareholders. For far too long, large corporations have recklessly pandered to the left and “bent the knee” to serve the woke elites. Today, however, America First Legal says enough is enough. (America First Legal)
“Federal law requires publicly-traded corporations to provide certain information to shareholders in their proxy statements that allow those shareholders to make informed decisions," said America First Legal Vice President and General Counsel Gene Hamilton. "As alleged in our complaint, Target failed to execute its duty to its shareholders by making statements that led them to believe that political and social risks were being assessed–when in reality, the only thing Target’s Board and Management cared about was how effectively they fulfilled the desires of various metrics advanced by leftwing 'stakeholders.' In so doing, they caused our client to lose a substantial amount of money, and we will vindicate his rights in federal court."
The lawsuit comes as Target reported a 5.4 percent decline in second-quarter sales, with CEO Brian Cornell acknowledging the “negative reaction” to its "pride" collection.
"As we navigate an ever-changing operating and social environment, we are applying what we learned," he said.
