Theft leads Target to close 9 stores in 4 states

Major US retailer Target will close nine stores in four states due to persistent theft and concerns for the safety of its workers and customers.

Closing on Oct 21 will be three stores in the San Francisco Bay Area, three in Portland, Oregon, two in Seattle and one in New York City.

"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," 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."

CEO Brian Cornell told analysts in August that violent incidents against workers at Target stores increased 120 percent for the first five months of the year compared with the same period a year ago.

"Our team continues to face an unacceptable amount of retail theft and organized retail crime," Cornell told analysts. "Unfortunately, safety incidents associated with theft are moving in the wrong direction."

Target said it will help employees at the nine stores find jobs at other locations.

One of the Target stores closing is near San Francisco's Union Square neighborhood. That area has seen at least 17 other retailers depart since 2020, including prominent names such as Abercrombie & Fitch, AT&T, Crate & Barrel, Gap, H&M, Office Max, Old Navy, Nordstrom, Walgreens, and Whole Foods.

Crime, drug use and homelessness in the California city were often cited as reasons for the store closings.

The Bay Area city has had a 10 percent increase this year in homicides, a 14.7 percent rise in robberies and a 5.4 percent jump in car thefts, according to city police data.

A Target store also is closing in Oakland, across the bay from San Francisco. On Tuesday, some 200 business owners in Oakland closed from 10 am to noon to call attention to crime in the area.

"We need your help," said Carl Chan, president of the Oakland Chinatown Chamber of Commerce, in a plea to local and state leaders to increase public safety, CNN reported. "When I'm saying that people don't feel safe, it's not only about the businesses."

The rally was held outside Le Cheval, a Vietnamese restaurant that has operated in the area for nearly four decades but will relocate. Crime is the main reason behind the restaurant's closure, particularly car break-ins and customers being robbed inside the restaurant, the restaurant's owner Son Tran told CBS.

"This restaurant survived the crack epidemic. This restaurant survived Occupy Oakland and the riots. This restaurant survived the pandemic," said Greg McConnell, who owns a local consulting firm, told CNN. "But this restaurant can't survive crime. We've got to put an end to this now."

Oakland has seen a 76 percent jump in commercial burglaries from 2021 to 2022, according to city police data.

Minneapolis-based Target, which operates 1,900 stores in the US, said it has invested heavily in strategies to prevent theft, such as adding more security guards, using third-party security services and installing theft-deterrent tools, like locking up merchandise.

But the company noted that it still faced "fundamental challenges" to operate the stores safely — and the financial results at the locations slated for closure was unsustainable.

Target said in May that theft was cutting into its bottom line and that it expected related losses could be $500 million more than last year, when such losses were estimated to range from $700 million to $800 million.

An increasing number of retailers, including Dick's Sporting Goods and Ulta Beauty have been cited rising theft as a factor in declining profits.

The National Retail Federation (NRF) said its latest security survey of 177 retailers found that inventory loss — called shrink — averaged 1.6 percent last year, representing $112.1 billion in losses.

The greatest portion of shrink — 65 percent — came from external theft, including products taken during organized shoplifting incidents, the trade group said Tuesday. More than two-thirds of respondents said they were seeing even more violence and aggression from perpetrators of organized retail crime compared with a year ago.

The NRF said that even though retailers continue to improve their loss-prevention measures, sometimes more drastic action must be taken. Nearly 30 percent of retailers surveyed reported being forced to close a specific store location, and 45 percent said they needed to reduce operating hours.

Target said Tuesday that it has teamed with the US Department of Homeland Security's Homeland Security Investigations division to address retail theft.

"Target, Kroger and Costco are the best in the country when it comes to investments in store security. So when Target calls out crime and says it's closing stores because of it, it's a blow to the community," said Burt Flickinger, retail expert and managing director of retail consultancy Strategic Resource Group, reported CNN.

"More than the sales tax that it generates, it's the commercial real estate taxes that go towards funding public schools and other community services," he said. "When a superstore like Target leaves the neighborhood, it erodes the economic strength of the community. Jobs are lost, suppliers no longer come to the area, shopper traffic drops."

Agencies contributed to this story.