Target learns that bowing to anti-DEI backers can be costly, a lesson for those bowing to Trump

Los Angeles Times

5 days ago

Has any American company run away from a public commitment faster than Target?
In an Aug. 19, 2020, conference call, Target Chief Executive Brian Cornell forthrightly put his company in the forefront of the quest for racial and ethnic justice. George Floyd had been murdered by Police Officer Derek Chauvin, abetted by several other officers in Minneapolis, Target's home city, only about three months earlier. Calls for recognition of the racism exposed by the killing were still reverberating nationwide.
'Our team is passionately demanding equity and justice for our Black colleagues and guests,' Cornell said. 'We are united in that passion and committed ... to playing an active role in addressing the persistent racial injustices that have sparked protests around the world.'
He said Target would put its influence to work 'to determine actions and resources that will move us towards a more inclusive, equitable and just society.'
The company ultimately committed to increase the racial diversity of its workforce and to spend billions of dollars with Black-owned suppliers.
How times change. This January, Target backed down. On Jan. 24 — just four days after President Trump launched his second term with a flurry of antidiversity executive orders — Target announced it was 'concluding our three-year diversity, equity and inclusion goals' and its 'Racial Equity Action and Change initiatives.' (REACH was an initiative Cornell had announced in that 2020 call.)
The company also said it was withdrawing from 'all external diversity-focused surveys,' including a widely followed Corporate Equality index sponsored by the Human Rights Campaign, which tracks corporate policies on LGBTQ+ rights and inclusion. And it said it was 'evolving' its 'supplier diversity team to 'supplier engagement.'
Target may have thought it was tacking toward consumer preferences, or that DEI was a craze that had faded out.
But here's the punch line: Target's sales have cratered, at least in part because consumers were angry about its reversals. The company's management has been a little vague about the impact of all this.
At a May 21 conference call with Wall Street analysts following its release of earnings for the first quarter ended March 31, Cornell alluded to the backlash without going into detail. He attributed the company's ugly performance — comparable-store sales down by 5.7% from a year earlier — to several factors, including 'the reaction to the updates we shared ... in January.' That was an obvious allusion to the dropping of DEI initiatives. But Cornell said 'we can't reliably estimate the impact of each [factor] separately.'
It's true that Target, like other big retailers, has had disappointing sales recently. In the last quarter, most have attributed any sales slump to consumer uncertainty about Trump's confusing tariff pronouncements. But the fact that Cornell felt obligated to mention the consumer reaction to Target's altered diversity policies is notable, and appears to be unique in the retail industry.
I asked Target for further comment on the issue but received no reply. But since Target had given its commitment to diversity a central role in its corporate persona, it's proper to take a closer look — not only at the company's experience, but also the course of corporate antidiscrimination policies more generally.
It's also worth noting that Target isn't the first institution to discover that abandoning principle isn't a sure path to material success or public esteem. That's been the experience of big law firms and major universities that kowtowed to Trump in his anti-DEI drive this year.
Several major firms that were threatened with or hit with White House sanctions made deals with Trump that included confessing to misbehavior that may not even have occurred and committing to hundreds of millions of dollars' worth of pro bono work that may be dictated by Trump — a departure from pro bono tradition, which typically means providing underserved groups or individuals with free legal representation.
The firms may have thought that meeting Trump's terms would be the best way to keep clients who might have been rattled by Trump's attacks on their lawyers. As it happens, some clients have fled anyway, possibly concluding that big firms that won't fight Trump might not defend them aggressively against other adversaries. Some also have lost lawyers, dismayed by the pusillanimous behavior of their leaders.
It turns out that law firms that have steadfastly rejected Trump's threats have been winning in their lawsuits against the White House's allegedly illegal and unconstitutional threats and sanctions. Federal judges have granted the firms Jenner & Block, WilmerHale and Susman Godfrey temporary restraining orders against Trump's sanctions. Federal Judge Beryl Howell of Washington, D.C., ruled Trump's executive order targeting the firm Perkins Coie unconstitutional and granted the firm summary judgment against the government.
Howell went further, taking a swipe at the firms that had capitulated to Trump. 'If the founding history of this country is any guide,' she wrote, 'those who stood up in court to vindicate constitutional rights and, by so doing, served to promote the rule of law, will be the models lauded when this period of American history is written.'
Universities such as Columbia are also discovering that the Trump administration has trouble taking 'yes' for an answer. Columbia publicly bent its knee to Trump in March, but that didn't save it from being hit with more sanctions from the White House last week over its supposed violations of civil rights law through purported 'deliberate indifference' toward harassment of Jewish students.
That brings us to the capitulation of American corporations to the partisan, ideological assault on diversity, equity and inclusion, and specifically to the fix Target is in.
I've written before about how corporate America is a thin reed to lean on as a counterforce to assaults from the political right wing on voting rights, women's access to reproductive healthcare and democracy itself.
Many companies that once expressed a commitment to end or at least review their contributions to the 147 Republicans who voted against certifying the 2020 election soon resumed their contributions. Some made similar promises to oppose state laws restricting abortion or voting rights, or talked openly about reducing their activities in states enacting such measures.
For the most part, these pledges have been all talk, no action. When Republicans campaigned against 'woke' policies or DEI — an abbreviation that had the virtue for the GOP of being vague enough to serve as an all-purpose slogan for conservatives — Walmart, Ford, Anheuser-Busch and John Deere, among other companies, rolled back their initiatives.
One of the exceptions to take a strong stand on behalf of DEI is Costco Wholesale. In a response to a shareholder resolution proposed by the right-wing National Center for Public Policy Research insinuating that Costco's DEI program 'holds litigation, reputational and financial risks to the Company,' Costco management reiterated its commitment to DEI. 'Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.'
The anti-DEI resolution was rejected by 98% of shareholders voting.
Target seemed well placed to be another exception. It's one of America's biggest retailers, with more than $100 billion in annual sales. Early in 2023, Cornell boasted that 'our long-standing commitment to diversity, and equity, and inclusion ... has fueled much of our growth over the last nine years.' In 2022, in fact, Target published a scorecard of its DEI progress—a 33% increase in corporate officers of color, 62% increase in promotions for people of color, spending of $1.78 billion with 'diverse suppliers,' and so on. 'We are never done,' it pledged.
About two weeks after Cornell's 2023 boast, the company capitulated to what I labeled a 'braying mob of anti-LGBTQ+ reactionaries' that had targeted Target during Pride Month, a celebration of LGBTQ+ communities every June.
Even though the company's stores had featured Pride-related merchandise for years, in 2023 it told personnel in many stores to reduce or even eliminate their Pride-themed displays or move the merchandise to less conspicuous sections of the stores. Some LGBTQ+ designers reported that their products have been taken off the shelves.
This year's retreat from DEI policies is merely a continuation of that craven approach. It has supplanted its straightforward commitment to diversity, equity and inclusion, as Cornell expressed it in 2020, with a steamy helping of corporate-speak mush.
'Belonging for all is an essential part of our team and culture, helping fuel consumer relevance and business results,' the company said in a publicly issued 'fact sheet' in January. 'We aim to create joyful experiences through an assortment of products and services that help all guests feel seen and celebrated, increasing relevance with consumers... . We build deep and lasting relationships with the communities we serve, driving impact, economic vitality and connection that fuels loyalty.'
The communities most affected by the pullback didn't buy into these vague promises. Black pastors and others launched boycotts of the company; judging from Cornell's pained observation to the Wall Street analysts last week, the boycotts may have had an effect. Whether Target continues to see a slide in sales because of customer discontent isn't clear at this moment, and it's certainly possible that consumer concerns about Trump's tariffs and their consequent upward pressure on prices will wreak the most damage.
But this is a lesson on the shallowness of corporate character. Trump, it has become evident, is himself all talk, no action. He doesn't have the legal power to end DEI initiatives at private businesses, and the cadre of followers who respond to his culture warfare may be nowhere as large as they think they are. But that only makes the faintheartedness of corporate America all the more dispiriting.