Target Corp. (TGT) -) said Tuesday it would close nine stores across four major U.S. cities following losses due to organized crime and theft that could cost the retailer more than $500 million this year.
Target said it would close stores in New York, Seattle, San Francisco and Portland on Oct. 21, and would enable employees in those locations to transfer to other locations.
Chief Executive Brian Cornell told investors last month that Target faced a 120% increase in theft, or threat of theft, over the first five months of the year. He warned that the group continued to face an "unacceptable" level of theft he linked to organized crime. Cornell said in May that theft from its U.S. stores would likely cost $500 million more than it did last year.
"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 said in a statement. "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 shares finished Tuesday trading off 2.5% at $109.48, compared with the nearly 1.5% drop in the S&P 500 index. The finish left the retailer's shares down almost 27% for 2023 to date.
The National Retail Federation defines "organized retail crime" as "the large-scale theft of retail merchandise with the intent to resell the items for financial gain." The trade group said members suffered more than $94 billion in losses over the 2021 financial year as a result.
Senate lawmakers, in fact, earlier this year introduced a bill to target so-called flash mobs that carry out large-scale theft. Lawmakers' move aims to "improve our federal response to organized retail crime and establishes new tools to recover goods and illicit proceeds, and deter future attacks on American retailers," according to co-sponsor Chuck Grassley (R-Iowa).
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