Target Shuts Down Nine Stores Amidst Surging Retail Crime Wave

On Tuesday, Target (TGT:US) responded to a rising wave of theft and organized retail crime by announcing the closure of nine of its stores spread across four U.S. states. The affected stores are in New York, Seattle, San Francisco, and Portland and will cease operations effective from October 21. Following the announcement, Target's stock price declined by nearly 1.36%.

"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 mentioned in a statement.

Before making this decision, Target “invested heavily” in strategies to prevent and stop theft and organized retail crime. Despite these significant security investments, the retailer still faced "fundamental challenges" in operating the stores safely.

A month prior to this decision, Target's CEO Brian Cornell mentioned in an August earnings call that there was a 120% increase in theft incidents or threats of violence during the first five months of 2023 compared to the previous year.

The National Retail Federation (NRF) reported an increase in shrinkage-related losses, reaching $112.1 billion in 2022, up from $93.9 billion in 2021. Additionally, 67% of NRF's survey participants noted an uptick in violence due to organized retail crime last year compared to its previous year. This points to an urgent need for enhanced security measures in the retail industry. 

“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire.” NRF Vice President for Asset Protection and Retail Operations David Johnston said in the NRF report

Congressman Ro Khanna was actively buying TGT shares throughout the year. Meanwhile, Democrat Josh Gottheimer disclosed recently that he sold some TGT shares in August. The stock is down 27.67% year-to-date.