June 4, 2023 | 10:02 a.m
Target has seen a significant drop in its market value as the retail giant faces a consumer backlash over the display of pride merchandise in stores around the country.
This controversy follows a boycott of Bud Light over their decision to market products featuring transgender social media influencer Dylan Mulvaney.
Former Target vice president Gerald Storch joined “Fox & Friends Weekend” and revealed the one item that “made the difference” against the competition and sparked the backlash.
He explained that many retailers carry pride merchandise, “you know, the plates that had different colors in them. Nice. You show the rainbow, you know, a gingerbread house, whatever you are, that̵[ads1]7;s all you know. Who cares? Everybody bring it with you.”
Storch zeroed in on one item from the store’s pride collection that set it apart from the competition and ignited the consumer firestorm.
“I’ve never seen a case where one thing, that tuck swimsuit, was really what made the difference compared to the competition. Therein lies the big mistake [was] made,” the former Target executive said.
The former executive shared an example of how he handled controversy with Babies “R” Us.
“We had a contest where the first baby of the year would get $20,000. You know, people were up in arms because, guess what, the first baby of the year was born to an undocumented immigrant and they didn’t have a tax ID or anything, and the people is, ‘oh God, you can’t give it to them. You’ve got to give it to them. Figure out a way. He continued, “You know what we did, we gave it to two babies and put out a giant press release. We all love babies.”
“At the end of the day, if you embrace and show it to people and you know, I hear you every morning, you know this too. That’s how you get a problem, is you have to address it as a real problem and show love to people and it works, he added.
“Now when you get out of trouble, you have to show love. I know it sounds kind of funny, but you know, forgiveness and love, that’s part of America, and that’s what you have to do.”
Storch noted that Target was also experiencing financial problems.
“The target stock has certainly underperformed by 11% year-to-date. So that’s not good, and certainly, this boycott of the whole thing here is not helping. It’s very distracting to have that going on in the business. But there are more fundamental concerns with that, with the environment, with the consumer and with the business here,” he noted.
The company’s market value has fallen since mid-May, with a drop of more than $12 billion.
“Target’s inventory decline, – actually began May 18.” He explained, “that’s the day Walmart reported a seven percent gain in store sales the day before. Target had reported flat sales, flat for the year at Target, up seven at Wal-Mart. There’s no way the comparison looks good.”
“The consumer feels very stressed, very stressed by the environment, by inflation, and Target is known as the exclusive discounter. So it is not good to be the exclusive discount at a time when the consumer does not have much money to spend. So they’re migrating more to Wal-Mart, and that’s a big problem.”
“While there is no doubt that the boycott is part of the problem, if you read the reports on Target during this period and the analysts have in mind related to the investors, who are the ones who are buying things about the stock or in this case probably selling picking the crowd of inventory. They are more concerned with the fundamental business issues.”
Storch noted that Target’s investors are watching “very, very closely” and want to know the effect on sales.
“You know, them [Target] certainly did not handle this well either going in or trying to deal with it on the way out. But I think that over time this will not be a big problem for them, he said.