In the world of retail, some companies have inadvertently dipped their toes in political conflict or taken stances on social issues in an effort to improve their business or remain on the good side of their consumers. But when some of those efforts go south and instead garner backlash from the general public, it can end up draining a businesses’ pockets significantly.
Recently, there has been an increase in activist investors sounding off against companies “going woke” due to fears of it resulting in financial loss.
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Most recently, Disney was in the midst of a proxy battle with billionaire investor Nelson Peltz who aimed to obtain seats on the company’s board of directors to overturn some of its decisions he labeled as too "woke,” claiming that the company has underperformed as a result.
Now, Target (TGT) and Dick’s Sporting Goods (DKS) are the latest businesses to face woke backlash from a group of its investors. The National Center for Public Policy Research (NCPPR), a conservative think tank, has planned to submit proposals for a vote at each of the company’s respective shareholder meetings on June 12 that will criticize them for “their costly prioritization of progressive politics over profit” and prevent board members from making politically motivated decisions in the future, according to a press release.
Target faced outrage over its pride collection last year for marketing LGBTQ merchandise towards children and selling transgender swimsuits. The backlash quickly escalated to consumers boycotting Target stores and employees facing bomb threats at certain locations.
In an effort to cool the fire, Target opted to remove a few items from its pride collection in August last year, and recently announced on May 9 that it will only sell items from the collection in “select stores” based on sales performance.
The NCPPR claims that the controversy surrounding Target’s pride collection “significantly” hurt the company’s finances.
“Target — which has paid partnerships with HRC and similar organizations like GLSEN and Out&Equal — disastrously engaged in such activism when it aggressively touted radical gender theory in its stores,” reads the press release. “The backlash that ensued hurt sales and the stock price significantly, which resulted in a $12 billion lawsuit against the Company and caused Target to be rated 'high risk' on 1792 Exchange’s Corporate Bias Ratings.”
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Dick’s Sporting Goods also found itself in the midst of controversy a few years ago after it pulled assault-style weapons from its shelves and raised the age for gun purchases to 21 at its stores following the mass school shooting that took place in Parkland, Fla., in 2018. Days after the shooting, Dick’s then-CEO Ed Stack reportedly told his top executives, “I don’t want to be part of the story anymore,” before making the decision.
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At Dick’s shareholder meeting, the NCPPR will introduce a proposal that seeks “greater board accountability for corporate acts taken to advance the political or ideological views of management.”
“A corporate decision was being made at the highest level, destroying as much as $250 million in shareholder value according to some reports, because the CEO thought his political beliefs about gun ownership gave him a license to treat the company like a personal plaything while brazenly disregarding his fiduciary duty to maximize shareholder value,” reads the NCPPR’s press release.
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