Friday, April 7, 2017

AFA, Target and the Wall Street Journal

Target Miami Store
American Family Association, an anti-LGBT hate group, has been rejoicing over a piece in the Wall Street Journal regarding Target Corporation. AFA's claims are overblown. Thursday's email from AFA starts with the headline: “Target CEO admits policy announcement was huge mistake.” According to the text of AFA's email:
A very damaging article just out from the Wall Street Journal clearly shows that Target CEO Brian Cornell regrets his company's policy announcement welcoming men to use women's restrooms and dressing rooms.

According to the article, Mr. Cornell expressed frustration about how the bathroom policy was publicized without his permission or knowledge, and told colleagues he wouldn't have approved the decision to flaunt it with a public statement that is still on Target's website today.
What AFA fails to mention is the fact that Mr. Cornell was never interviewed by the article's author, Khadeeja Safdar. I spoke with Ms. Safdar and she made an effort to provide a balanced piece — which it is. She is a retail specialist and presumably has good sources at Target. Nevertheless, that is no substitute for actually speaking with Target CEO, Brian Cornell.

Moreover, we don't know the level of authority that any of those sources have. Ms. Safdar would probably be unaware of any personal biases that might influence how they characterize events. My greatest disappointment with the piece is that Ms. Safdar never mentioned the fact that AFA is a designated hate group. She did make the effort to speak with someone at SPLC. I get the sense that the reference was taken out by Safdar's editors.

I have been struggling with writing about this for a couple of days because the Wall Street Journal is very touchy about “fair use.” Hopefully I can strike a reasonable balance.
A few weeks after the post, Mr. Cornell defended the policy in a television interview, saying Target had a “long history of embracing diversity.” He said Target’s bathroom policy was similar to rivals’.
It is most important to point out that Cornell's issue is not the policy which, by the way, had been in place for years. His feeling is that the announcement was unnecessary. Safdar correctly points out that Wal-Mart has the very same policy. Furthermore, the company continues to insist that AFA's boycott had no material effect on fourth quarter earnings. Whatever effect it did have is likely to diminish over time. According to one shopper:
“I tried not to go there, but it’s hard when you like the store,” said Mari Arnett, 62, a Colorado Springs, Colo., homemaker. “I just don’t care too much for Wal-Mart.”
Just to be clear, the announcement did not require Cornell's consent (AFA uses the word “permission” which is misleading):
At least two of Mr. Cornell’s lieutenants approved the post, including Target’s chief risk officer, Jackie Rice, and its chief external-engagement officer, Laysha Ward. Both executives declined to comment.
There is also a fair measure of correlation in contrast to causation:
The stores hurt the most were in the South and often located near Wal-Mart locations, they found. Executives realized many stores were physically worn down and weren’t competitive on prices of commodity goods.
AFA is in Tupelo, Mississippi and much of its constituency is in the South. I think that the meaning of the above paragraph becomes clearer if we insert the word “however” before the second sentence. In other words, the boycott might have hurt southern stores the most but those stores were also not competitive with neighboring Wal-Mart locations in terms of environment and prices.

There is one unfortunate quote attributed to Mr. Cornell that Ms. Safdar confirmed with several sources:
Mr. Cornell, 58 years old, expressed frustration about how the bathroom policy was publicized, and told colleagues he wouldn’t have approved the decision to flaunt it, these people said.
Just to be clear, his approval was not required. Nevertheless, I take offense to the word “flaunt.” Historically, that has been used to justify violence against gay men as in; “he flaunted it.” I am reluctant to criticize someone who seems to be an ally but it is in the piece and it is offensive.

The bottom line to all of this is that Target is never going to change their policy and American Family Association continues to demonstrate whey they are designated a hate group. They are also heavily invested in the Target boycott and desperate to show supporters that it is effective. Target took a hit to earnings in the fourth quarter because of increased competition from Amazon and other online retailers. The company remains quite profitable, simply not as profitable as analysts had projected which is why the stock took a hit. Its P/E ratio remains c

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