|
?:reviewBody
|
-
On 28 February 2017, Breitbart.com reported that big box retailer Target's stock had crashed, losing a combined total of $15 billion in investor wealth, because of the chain's announcement in 2016 that it would allow transgender customers and employees to use bathrooms corresponding to their gender identity: On 19 April 2016, Target announced that transgender customers and employees were free to use the restroom that corresponded to their gender identity amid a national row on the subject during the 2016 election cycle. The announcement came after North Carolina enacted the controversial HB 2 in March 2016, a law that came to be colloquially termed the bathroom bill, and required public single-sex restrooms only be used by people of the corresponding biological sex. The controversy, and Target's definitive stance, prompted conservative groups like the American Family Association (AFA) to launch a boycott. Nearly 1.5 million people have signed the AFA's petition as of 1 March 2017. Target shares did plunge on 28 February 2017, but it wasn't due to its nearly year-old bathroom policy. The drop was due to 2017 guidance announced during an investor day event. Projections were far lower than expected by Wall Street analysts (the term guidance means projected earnings). The drop in Target stock corresponds to the announcement made at their investor event: According to Edward Jones analyst Brian Yarbough, Wall Street was expecting Target to project earnings of $5.30 per share, but the company instead gave guidance of $3.80 to $4.20 per share which was well below expectations, prompting the drop in share value. According to Reuters, Target's dive dragged others down with it: What is dogging Target and other retailers has been competition with all-online retailers like Amazon, which do not have the overhead cost of brick-and-mortar locations. Target, for example, has 1,803 stores. Online players don’t have a huge network of stores and since they don’t have that cost, they can offer lower prices, Yarbough said. Customers also have the immediate ability to do price-comparisons with smart phones. These changing patterns are reflected in a statement given by Target CEO Brian Cornell: Although Target offers online shopping, profit there tends to be lower due to associated costs like shipping and price competition from the likes of Amazon. Retailers are struggling to survive with more profitable in-store sales lagging, and lower profit margins due to a growing contingency of online shoppers: Target maintains the bathroom policy has had no effects on its business, with company spokeswoman Erika Winkels telling us in an e-mail, We have made it clear over time that we’ve seen no material impact to the business based on the bathroom policy. We don’t have anything new or different to share. A poor performance in the 2016 holiday season was also attributed to online sales outpacing foot traffic, but Target is, again, not the only chain feeling the effects: Nevertheless, Neil Saunders, managing director of GlobalData Retail, told us that Target could be worse off than it is: Saunders told Reuters that while Wal-Mart has been buoyed by successfully offering groceries, Target has not been able to keep up on that front, calling its grocery offerings confusing. Target is neither a full-line grocer nor a player with lots of niche specialty products; it is neither a high-end player, nor a price focused discounter, he said. It is difficult to say with certainty whether the Target's commerce overall has been negatively affected by its policy on transgender people. Although company representatives have maintained it has not, shortly after Cornell made the announcement, USA Today reported a study that showed the percentage of people who would consider shopping there the next time they needed something dropped from 42 to 38 percent. But the retail industry as a whole is facing a dramatic shift in consumer behavior, and retailers have struggled to keep pace with it. Target's late February 2017 stock drop, however, was the result of announcements made during an investor day event, and cannot be attributed to their policy on bathroom use.
(en)
|
![[This page as RDF]](http://data.gesis.org/claimskg/static/rdf-icon.gif){kind=icon}