Retail giant Target Inc. (NYSE: TGT) announced its decision to shutter nine of its stores spread over four states in the U.S., including the Golden State of California.
This move is in response to the increasing concerns related to theft and structured retail crime, jeopardizing employee and customer safety.
The closures, which will come into effect from October 21st, will include one branch in New York City, two stores in Seattle, three in the combined San Francisco-Oakland zone, and a trio in Portland market.
Even after pumping considerable resources into strengthening its security infrastructure, Target faces intrinsic hurdles in ensuring a secure shopping experience at these locations.
"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," the company officially communicated.
This isn't just a Target-centric issue. Retailers across the U.S. are grappling with an uptick in theft and systematic retail crime.
Organized crime rings specifically focusing on retail inventories have exacerbated the financial stress on businesses.
A recent revelation by the National Retail Federation (NRF) indicated that inventory shrinkage, expressed as a fraction of overall retail sales, led to losses amounting to a staggering $112.1 billion in 2022. This marked a significant leap from the previous year's figure of $93.9 billion, according to a report from Reuters.
The company plans to facilitate transfers for eligible employees from the impacted stores to alternative Target branches.
Price Action: TGT shares closed lower by 2.48% at $109.48 on Tuesday.