Today was the first shareholder meeting of the retail giant Target since its April 19 announcement that people can no longer expect that its fitting rooms and restrooms are for the use of people of the same biological sex.
Target's management referred to this as a "welcoming" gesture, but over 1.3 million Americans signed an American Family Association petition saying they no longer plan to shop at Target as a result.
The National Center for Public Policy Research's Free Enterprise Project (FEP) was on hand at the shareholder meeting, where FEP Director Justin Danhof spoke. He also asked Target CEO Brian Cornell a question about its new fitting and restroom policy.
Sarah Halzack of the Washington Post covered our activities at Target, writing, in part:
...Against that backdrop, Justin Danhof, a director at the National Center for Public Policy Research, raised the topic at Target’s Wednesday shareholders’ meeting in Costa Mesa, Calif. Danhof asked Target chief executive Brian Cornell whether he believed that customers and investors who disagree with Target’s policy are bigots, as well as whether Cornell regretted implementing the policy. Danhof said Cornell responded to his questions by speaking generally about the retailer’s focus on diversity. A Target spokeswoman said that Cornell “very much did reiterate that we want to be a place that is welcoming, comfortable and safe” for all shoppers.
Danhof was disappointed in Cornell’s answers, saying, “I’ve never left a meeting feeling that empty.”
Target told reporters in May that it had been monitoring sales and customer behavior closely in the wake of the bathroom policy announcement and said it has not detected any impact on sales. A Target executive reiterated that finding at the shareholders’ meeting on Wednesday...
I think it is extremely strange that Target's management did not prepare a solid, detailed defense of its actions for use at the shareholder meeting today. No retail store shareholder likes to see 1.3 million people sign a petition boycotting their store, and Target's stock value has dropped 18 percent during the seven weeks since the restroom announcement.
The Post's Halzack took issue with us noting the stock price drop, countering:
...NCPPR, the conservative think tank where Danhof works, notes that Target’s stock has sunk recently and suggests that this is evidence of negative fallout from the bathroom policy. But last month, Target delivered a lackluster first-quarter earnings report and gave a gloomy forecast for the second quarter, which analysts have suggested is likely the reason investors have soured on the stock. Plus, the retail industry has generally been in a rough patch, which probably hasn’t helped investors confidence in the Minneapolis-based company...
Here's the thing. If investor confidence is likely to affect the stock price, as Halzack says (and I agree), what is the impact on investor confidence when a restyle giant's management team responds to a "lackluster" first quarter by jumping headfirst into a highly-controversial culture war issue? Wouldn't most shareholders prefer to see management focused on sales?
This is especially true in the case of Target. Many of its stores have "family" style restrooms designed for single use, and the chain has decided to convert the restrooms in all of its stores to the family style. So Target would have found it easier than most stores to skip this particular culture war battle entirely, taking no sides, and making no one unhappy.
But, instead, it decided to get political.
As the Washington Post story explains, Target's management declined to explain why it did what it did. I guess it believes shareholders aren't entitled to know.