Target Shareholders Face Further Losses as Pride Merchandising Controversy Takes Toll

Target, the big-box retailer, experienced another drop in its stock value on Thursday, adding to the ongoing losses suffered by its shareholders following the company’s Pride merchandising controversy. The total loss in market value now hovers around the $13 billion mark.

At the close of the market, Target’s stock finished down 0.4%, leaving shares valued at $131.27. This represents a significant decline from the stock’s value of $161 just last month. Since the controversy surrounding the Pride displays erupted, Target’s market cap has plummeted by approximately $13 billion, now standing at $60.06 billion based on Thursday’s closing price. Prior to the controversy, Target’s market value was over $74 billion, according to Dow Jones Market Data Group.

The controversy began when Target initially faced criticism from conservatives over its Pride displays, which prominently featured children’s items. However, the LGBTQ community expressed outrage when the displays were subsequently scaled back ahead of Pride Month. As a result, the retailer endured nine consecutive days of losses, facing backlash from both sides of the issue.

KeyBanc Capital Markets downgraded Target’s shares on Monday from “overweight” to “sector weight.” This decision was influenced by concerns over the resumption of student loan payments, mandated by Congress’ debt ceiling agreement, which could significantly impact discretionary spending for shoppers. Target relies on a consumer demographic with an elevated discretionary sales mix and a younger, college-educated core.

JPMorgan Chase & Co. also downgraded Target stock last week, moving it from “overweight” to “neutral.” Analysts cited the possibility of declining sales as consumers may reduce their spending amidst persistent inflation.

During this quarter, Target shares have fallen by over 20% due to the fallout from the Pride merchandising controversy. Last month, Target confirmed that it was making “adjustments” to its Pride merchandising plans after facing criticism. Fox News Digital revealed that some Southern stores were instructed by the corporation to move LGBTQ Pride merchandise away from the front of their locations to avoid further customer outrage. However, this move caused additional problems as many LGBTQ advocates criticized the decision, and California Governor Gavin Newsom accused Target of participating in a “systematic attack” on LGBTQ communities nationwide.

Target’s approach to “rainbow capitalism,” as described by LGBTQ advocate Heather Hester, has drawn criticism. Hester argued that the retailer prioritized profit over genuine support for the community. Target’s Pride merchandise included items such as swimsuits designed for individuals to “tuck” male genitalia, products labeled as suitable for “multiple body types and gender expressions,” and controversial items for children, including a coloring book featuring same-sex couples kissing.

Furthermore, Target’s Pride collection has faced scrutiny for its association with designer Erik Carnell of Abprallen, known for his controversial brand featuring occult imagery and messages like “Satan respects pronouns” on apparel.

As the fallout from the Pride merchandising controversy continues, Target’s shareholders are left grappling with significant losses in stock value. The company now faces the challenge of restoring investor confidence while navigating the complex dynamics of customer expectations and societal values.