February 4th 2025.
According to a recent report by Reuters, shareholders of popular retail brand Target are taking legal action against the company for its failure to anticipate potential risks associated with its diversity, equity, and inclusion and social initiatives. The lawsuit, led by the Florida City of Riviera Beach Police Pension Fund, claims that the Minneapolis-based retailer misled shareholders into paying higher prices for its stock while unknowingly supporting management's use of investor funds for political and social purposes.
One of the main points of contention in the lawsuit is the backlash from Target's diversity, equity, and inclusion efforts, which allegedly resulted in decreased sales and a significant drop in the company's stock value. The shareholders accuse CEO Brian Cornell and other officials of failing to disclose the potential risks of boycotts related to the company's Environmental, Social, and Governance and Diversity, Equity, and Inclusion initiatives. Target, known for its support of Black History Month and Black creators like lifestyle influencer Tabitha Brown, also faced criticism for scaling back its Pride Month campaign in May 2023.
The backlash from the LGBTQ+ community and their allies, including in-store confrontations and the removal of LGBTQ+ merchandise, further fueled the shareholders' claims that Target covered up the negative impact of its diversity and inclusion efforts. In November 2024, Target's share price plunged by 22%, resulting in a loss of nearly $15.7 billion in market value after disappointing profit and holiday sales forecasts.
According to Newsweek, one shareholder named Brian Craig pointed to an article from Bloomberg that described Target as a store for "boomer moms who drive minivans and live in the suburbs." He accused the company's directors of betraying their core customer base of working families and investors by making false and misleading statements about the impact of their Environmental, Social, and Governance and Diversity, Equity, and Inclusion initiatives, specifically citing the failed 2023 children-and-family themed LGBTQ+ Pride campaign.
Target is just one of many Fortune 500 companies, including McDonald's, Walmart, John Deere, and Tractor Supply Co., that have faced pressure and backlash from the Trump-Vance administration for their diversity and inclusion policies, which have been labeled as "racist." As a result, some of these companies have scaled back their initiatives, and federal DEI programs have been eliminated under the first executive order signed by President Donald Trump, leading to job losses and leave for hundreds of employees. This move has been supported by several Republican lawmakers and leaders who have also pushed for their states to follow suit.
In response to these actions, civil rights and religious leaders like Rev. Al Sharpton and Atlanta's Pastor Jamal Bryant have called for Black customers to boycott Target and other stores, arguing that these initiatives do not truly cater to their needs. The law firm representing the shareholders, Grant & Eisenhofer, has issued a statement encouraging a lead plaintiff to join the lawsuit, with a deadline of April 1, 2025. However, they also note that any shareholder is eligible to participate in any potential recovery, whether or not they choose to become a lead plaintiff.
In other news, the FDA has recently made the decision to revoke FD&C Red No. 3 for use in food and drugs. This was announced on January 31, 2025, and is significant progress in the effort to make our food and drugs safer for consumption.
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