Would George D. Dayton, founder of Target (originally Dayton Dry Goods Company), ever have imagined the company he started would drift so far from the moral foundation he started with? Even to the extent that the company would promote a policy allowing men to use women’s restrooms and dressing rooms?
Dayton founded and ran the company, as did his son Nelson Dayton, guided by his Presbyterian faith. He would not permit the sale of liquor and refused to advertise in newspapers that permitted ads for alcohol. Furthermore, his store was closed on Sunday and he would not even permit employees to conduct business travel on Sundays.
Target’s tragic path began after the death of Nelson Dayton in 1950 when the third generation of Daytons took the helm of the corporation. Soon thereafter alcohol was permitted in store dining rooms and Sunday became just another work day. In the late 1960s, Target’s philanthropic foundation, then called Dayton-Hudson Foundation but now Target Foundation, began a 22-year financial commitment to programs and organizations like Planned Parenthood which promotes pregnancy prevention and abortion.
In 1990, prolife advocates called out the company and foundation leadership for financially supporting Planned Parenthood. As a result, Target’s foundation initially suspended support of Planned Parenthood, but reversed its decision only a few months later. The reversal was motivated by a pro-choice boycott.
In 1996, Target’s foundation gave more than $10,000 to District 202 which was a center for LGBT youth. District 202 was located in the backyard of Target’s headquarters in downtown Minneapolis. The LGBT hangout was a place that held homosexual teen dances and functioned as a meeting place to establish homosexual relationships. At least 2,000 kids visited District 202 for a total of around 12,000 visits in 1997.
On April 19, 2016, Target incorporated the same LGBT ideology in its retail stores as it did at District 202. It’s store policy opens the door for men, who consider themselves to be women (or transgender), to enter the women’s restroom or dressing room. The issue with Target’s already problematic facility usage policy is that it further opened the door for guests to be sexually exploited and violated as these examples can attest. This is why the American Family Association (AFA) chose to boycott Target and until the retailer makes the safety of women and children a priority, we are asking that if you haven’t done so already, to sign the boycott Target pledge.
Those who have already signed the pledge (1.48 million strong) and committed to shopping elsewhere have had a significant effect on foot traffic in Target stores and an even greater impact on the retailer’s stock value. Since Target announced their bathroom/fitting room policy on April 19, 2016, Target’s stock value has dropped -34.21%. Shortly after the boycott was announced foot traffic dropped a staggering 2.2% and sales fell 1.1%.
The chart below compares stock performance of Target (red), Walmart (blue), Retail index (green), and Amazon (gold). The graph range is from December 28, 2015 through March 30, 2017. April 19, 2016 (on the far left) marks the date Target made its transgender bathroom statement, and April 20 is the day AFA began the Target boycott.
On February 28, 2017, Target released its earnings report for both the fourth quarter and the year. The report indicated Target’s significant drop in sales and earnings, and stock market investors severely punished the retailer for the less than lack luster performance as represented by the sharp decline on that day as indicated on the right side of the chart below.
Nearly a year prior to Target’s 2016 announcement and promotion of their transgender bathroom policy, Chairman and CEO Brian Cornell gave a statement on vision and strategy for the future. He said the company had identified “key initiatives” to grow Target even larger. The transgender bathroom policy was obviously one such initiative.
Such initiatives require a corporate risk mitigation analysis that helps a corporation determine if a decision is a risk worth taking. If a business chooses to take the risk, then the analysis helps the corporation know how to minimize the adverse effects. Target Chairmen and CEO Brian Cornell was asked at the June 2016 shareholders meeting, “Did Target conduct a cost/benefit analysis before announcing its policy to allow biological males into women’s restrooms?” Chairmen and CEO Brian Cornell answered saying the transgender bathroom policy was embraced by management because Target believes strongly in the importance of diversity and that it would help produce better performance for the company. Neither Cornell nor Chief Financial Officer (CFO) Catherine Smith admitted that management ever conducted a cost/benefit analysis.
Instead, the transgender bathroom decision was based on an ideological belief that gender diversity in restrooms and dressing rooms would drive Target’s performance (stock value and earnings-per-share) higher. Furthermore, Cornell not only refused to admit if a cost/benefit analysis was completed, but also stated the bathroom policy was not driven by any corporate philosophy. Yet, recent history of Target’s financial support of District 202 – the Center for Lesbian, Gay, Bisexual and Transgendered Youth – as mentioned above, certainly calls into question Cornell’s answer.
Target has hit the trifecta but in a negative way. It has been willfully deaf to the expressed safety concerns of their consumer base, willfully blind to the numerous accounts of voyeurs using the bathroom policy to violate the privacy of Target’s guests, and willfully mute in its resistance to reverse its bathroom policy.
Target has lost its way from the moral foundation established by George D. Dayton. Common sense morality has been abandoned as the retailer’s current leadership has plunged into the politics of a politically correct agenda.
If Target’s history is any indicator of the future, its investors will have to put pressure on the company’s board before they will be willing to change. Pray that they do. But in the meantime, AFA’s lead to boycott Target marches on.