An investor in Target has taken legal action against the retail giant, alleging the company provided misleading information regarding potential risks associated with its LGBT-focused marketing and its diversity, equity, and inclusion (DEI) policies.
Brian Craig, an investor holding more than 200 shares in Target, filed a lawsuit on Tuesday with the assistance of America First Legal (AFL), Boyden Gray PLLC, and Lawson Huck Gonzalez PLLC in Florida.
The legal document suggests that Target’s board and its DEI policies, as well as its Environmental, Social and Governance (ESG) commitments, resulted in substantial financial losses for its shareholders, particularly due to its LGBT-Pride campaign in 2023 aimed at families and children.
Craig’s lawsuit insists that Target’s executive board and managerial team did not fully communicate the risks of their social and political stance to shareholders.
It further alleges that they did not adequately anticipate or address the concerns of its more traditionally-oriented customer base when implementing ESG and DEI strategies.
In the aftermath of Target’s “Pride” month promotion in June, the company experienced a $14 billion drop in market value.
Controversially, products offered during this period included female swimsuits labeled as “tuck-friendly” and having “extra crotch coverage.”
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Apart from the swimsuits, Target also showcased items such as t-shirts with messages like “Just Be You And Feel The Love,” rainbow-colored children’s wear, and Pride-themed onesies.
Following a surge of criticism, partly fueled by conservative commentators advocating for a boycott, Target decided to reposition certain “Pride displays” and even removed a selection of products from their inventory.
Gene Hamilton, AFL’s Vice President, commented on the matter, noting Target’s alleged neglect of federal requirements concerning risk management disclosures for publicly-traded entities.
Hamilton stated, “As alleged in our complaint, Target failed to execute its duty to its shareholders by making statements that led them to believe that political and social risks were being assessed — when in reality, the only thing Target’s Board and Management cared about was how effectively they fulfilled the desires of various metrics advanced by leftwing ‘stakeholders.’”
Interestingly, Elon Musk, CEO of Tesla and owner of X, had earlier warned of potential legal repercussions for Target.
In June, Musk shared on X: “Won’t be long before there are class-action lawsuits by shareholders against the company and board of directors for destruction of shareholder value.”
