A FORMER retail CEO has accused Target of pulling a stunt to divert attention away from poor performance.
Target closed nine stores earlier this year citing crime as the reason but an investigation found that other factors may have played a role.
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On September 26, Target announced it was closing nine stores in four states, saying that theft and organized crime made the locations too dangerous to keep open.
“We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance,” Target said in a statement.
“We can only be successful if the working and shopping environment is safe for all.”
Former CEO of Sears Canada and Columbia Business School professor Mark Cohen isn’t so sure that crime is the reason for the closures.
Cohen believes that theft could have been a way for Target to hide that their sales had dropped.
“I don’t want to use the word ‘stunt,’ because I don’t know exactly what went on in Minneapolis [where Target is based], but to me, it read like a stunt, looking to divert attention from the company’s lack of performance overall,” Cohen told CNBC.
“They did not disclose their actual shortage statistics.
“They talked about it in general terms; they did not disclose any other factors that would have caused them to decide to close any of those stores.
“They implied that the only reason they were closing the stores was because of theft. That may or may not be true. My guess is: Not true.”
Cohen’s comments come after CNBC analyzed data showing that the crime rate was higher in other nearby stores that were kept open, compared to locations that were shut down.
Many of the shuttered stores were small-format locations, which were part of an experiment to expand the retailer’s footprint into highly populated urban areas.
Four similar stores were closed in the spring after concerns over their performance, Retail Dive reported.
Target declined to share its internal crime rates, which are unaccounted for in the data CNBC collected.
Both Cohen and CNBC said that the analysis raised questions about whether the retailer was trying to hide poor financial performance.
Target’s comparable sales declined for a second straight quarter, CNBC reported in November.
In response to the CNBC investigation, Target spokesperson Jim Joice said: “[Target is] continuously opening new stores, initiating remodels, investing in our team and infrastructure, and refining our operations as we seek to deliver the shopping experience that people have come to expect of Target.”
He added that 21 new stores opened in 2023 and 1,956 locations currently operate in the United States.
Target didn’t respond to The U.S. Sun’s request for comment.
The U.S. Sun previously reported on a Target small-format store that closed down in Minneapolis, Minnesota, the same city the mega-retailer is headquartered in.
The closure was due to lack of foot-traffic, according to a Target spokesperson.
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