Target’s shareholders are suing the company as they believe Target hid the risks of its DEI initiatives, as stated by USA Today. In a proposed class action, Target’s shareholders claim that they felt that the company was unaware of the consequences that would surface due to DEI efforts. Additionally, the shareholders claim they were swindled into paying higher fees for its stocks and unknowingly supported its “misuse of investor funds to serve political and social goals.”
In addition, before Target announced it was rolling back on its DEI efforts, shareholders alleged that the company was not transparent about the backlash it received over campaigns linked to Pride Month in May 2023, which led to the removal of products associated with the campaign.
Target rolling back on its DEI efforts
In a memo shared with employees, the company said it will end its three-year DEI goals, concluding its Racial Equity Action and Change (REACH) initiatives in 2025 and end a program focused on carrying more products from Black- or minority-owned businesses.
Kiera Fernandez, chief community impact and equity officer at Target, sent a memo out to staff stating that “Many years of data, insights, listening, and learning have been shaping this next chapter in our strategy,” Fernandez said in the memo, viewed by CNBC.
Backlash from Black consumers and founders
Black consumers and business owners expressed their disappointment with the retailer. Part of Target’s DEI goals was to expand Black representation by 20%. Now, the company hosts several small independent Black-owned brands stocked at Target. Brands include The Lip Bar, Black Girl Sunscreen, and Tabitha Brown’s collection.
Melissa Butler, founder of the Lip Bar, said she was disappointed with Target’s decision to end its DEI initiatives but wasn’t shocked by the recent move. “I’m not that surprised. I always thought that the 2020 commitments were a farce,” she added.
Image: Retail Dive/Daphne Howland
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