Big-box retail chain Target will be making “modifications” to its Pride Month collection in a bid to defuse the controversy over its transgender merchandise.
Target suffered a 5.4% decline in quarterly same-store sales, its first decline in six years, and cut its sales and earnings guidance for the full year after a backlash surrounding its assortment of over 2,000 LGBTQ-related products found offensive by certain consumers.
Now Target’s management wants to be a lot more selective when it comes to its next Pride Month collection. While this will also apply to other merchandise designed to celebrate Americans of various backgrounds and minorities, only the LGBTQ items have triggered widespread controversy.
“We’ll have a slightly more focused assortment and will evolve our store and digital presentations,” said chief growth officer Christina Hennington in comments to the media reported by Yahoo Finance on Wednesday. “We’re going to reconsider the mix of our own national brands with our external partners. And so…you’ll see us celebrate these heritage moments but with these modifications.”
While Target saw fewer shoppers in its stores and cut its guidance as demand for discretionary items softened, rival Walmart reported on Thursday same-store sales in its U.S. Market grew by 6.4% in the last quarter and hiked its full-year outlook as widely-expected. It enjoys a much higher exposure to groceries, an essential purchase, than Target and is now attracting many more consumers that earn over $100,000 a year.
The transgender debate ensnaring Target has been at the center of America’s culture war, whether it be beer drinkers abandoning Bud Light in droves over the brand’s attempt to shed its “fratty” image through a Dylan Mulvaney promotion, or trans activists demanding consumers boycott a Harry Potter video game.
Tesla CEO Elon Musk—who himself has an estranged child who identifies as transgender—has used his $44 billion social media platform to amplify anti-trans messages, prompting the resignation of key staff during Pride Month.
Sales and traffic see ‘meaningful recovery’
The controversy over Target’s collection, which included so-called “tuck-friendly” bathing suits designed to conceal male genitalia, triggered a scare among the retailer’s workforce.
Many experienced a wave of threats from Target’s own customers and felt their own personal safety was at risk.
“To protect the team in the face of these threatening circumstances, we quickly made changes, including the removal of items that were at the center of the most significant confrontational behavior,” said CEO Brian Cornell during a call with investors on Wednesday.
Foot traffic and sales at the retailer subsequently saw “meaningful recovery” in July after tailing off markedly in the latter half of May, when its Pride Month collection was launched.
LGBTQ designer Erik Carnell, whose products were removed from all of Target’s stores, has criticized the retailer for never reaching out to him to inquire about his health despite him receiving death threats.
He argued management’s behavior set a precedent that companies could be pressured into abandoning the community.
“It’s completely fine to profit off of us, to stick with the rainbow capitalism and to focus on the pink dollar,” he told Reuters at the end of May. “But the second it gets hard, if you’re gonna jump ship, that’s a very dangerous thing to tell people.”
When probed on Wednesday’s investor call on his strategy going forward for winning over inclusive customers, particularly those among the LGBTQ+ community, Cornell emphasized instead the importance of giving “all families” a place to recharge while shopping for their everyday needs.
“We want to make sure Target is that happy place for all of our guests,” the CEO said.
This updates the story with quarterly results from Target rival Walmart.