In a statement issued to its customers, the popular chain outlined its efforts to combat criminal behavior within its stores. The statement emphasized that the decision to close stores is never taken lightly and is only made after significant efforts to enhance the customer experience and improve business performance.
"At Target, we take the decision to close stores very seriously, and only do so after taking meaningful steps to invest in the guest experience and improve business performance. With that said, we have made the difficult decision to close nine Target stores across four states, effective Oct. 21," the statement read.
"In this case, 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. We know that our stores serve an important role in their communities, but we can only be successful if the working and shopping environment is safe for all."
Target then outlined its store policy changes, including its partnership with the Homeland Security. These actions come in response to Target's recent announcement of store closures in major cities, including New York City, Seattle and Portland, due to the rising levels of crime. (Related story: Target to spend $5 billion on its stores to prevent them from shutting down.)
Target CEO Brian Cornell had previously cautioned that historically high crime rates could compel the company to make difficult decisions.
The company has taken several steps to combat theft and organized retail crime, including investing in additional security team members, using third-party guard services and implementing theft-deterrent tools across the business.
For example, Target used locking cases for merchandise categories that are prone to theft. It also invested time and resources in training their store leaders and security team members so they can protect themselves and de-escalate potential safety issues associated with organized retail crime incidents.
In addition, the company is making significant investments in cyber defense to combat retail theft, fraud and abuse. The partnership with Homeland Security is aimed at stopping looters and ensuring the safety of Target's guests while shopping.
Target's inventory loss to reach $1 billion this fiscal year
According to Target's second-quarter earnings report, the company lost nearly $219.5 million more during the three months that ended July 29 than it did during the same period last year.
In May, Target had warned that theft and organized retail crime were hurting profitability and could reduce it by more than $500 million, on top of the $650 million in losses it incurred in 2022.
Target's inventory loss, called shrink, totaled about $763 million last fiscal year, based on calculations from the company's financial filings. It is on pace to lose more than $1 billion this fiscal year from shrink.
The retail giant is also set to close nine stores across four states: one in Manhattan’s East Harlem; two locations in Seattle; three stores in the San Francisco-Oakland area; and three more in Portland, Oregon.
Learn more about the flailing fortunes of many American corporations at MarketCrash.news.
Watch the report about Target closing stores across the U.S. due to theft and riots.
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