Investor Group Letter Outlines Leadership Failures

In the letter, the activist group points out what it sees as Target’s management failures, including rolling back diversity, equity and inclusion initiatives, cutting back its LGBTQ+ Pride collection, and, most recently, its tepid public response to Immigration and Customs Enforcement raids at Target’s Minnesota locations.

A Target spokesperson referred me to the 2026 proxy statement where the company’s position on board elections is outlined. The spokesperson further confirmed that Target doesn’t have a cooperative agreement with ICE and has no formal relationship with immigration agencies.

“Target, especially in the wake of George Floyd’s murder in May 2020, was widely recognized as a leading proponent of DEI initiatives, and its decision to reverse course on an issue where it once set the standard really undermined consumer trust in the brand and weakened its connection to the very communities that once saw it as an ally," said Emma Bayes, SOC Investment Group Deputy Director.

“They made a very clear calculation that conservative political pressure was the greater threat, and in the process they were alienating customers and employees and community members that all had been stakeholders and customers,” said Jonas Kron, chief advisory officer of Trillium Asset Management.

CEO Michael Fiddelke Seen As Having Little Autonomy

“Cornell was the CEO of Target, and Fiddelke, the current CEO, is an internal hire, so he’s already cut from the same cloth,” said Kron. “He came up under Cornell’s leadership. I think we need to see change, not continuity, so maybe he’s not the right person for the job.”

Bayes agreed that Cornell’s role as executive chair is problematic against a backdrop of years of underperformance. “The retention of Brian Cornell as executive chair and special advisor is especially difficult because it keeps him deeply involved, which jeopardizes the turnaround,” said Bayes. “The arrangement creates ambiguity and weakens the new CEO’s independence.”

Cornell’s departure as CEO was made public in August, when Target veteran Fiddelke was named as his successor. When the move was announced, some industry experts were skeptical that Fiddelke would be able to make the necessary changes with his former boss ensconced in the boardroom.

Fiddelke took over the CEO suite in February and has unveiled some features of his turnaround strategy, including simplifying Target’s executive structure so it can advance the strategy with more speed.

Target’s share price is up around 30% this year and several analysts have upgraded price targets since Fiddelke took over as CEO.

“There’s been a large, broad frustration from the investor community with Brian Cornell and the company addressed that a year ago when they named Michael Fiddelke CEO,” said Joseph Feldman, senior managing director of Telsey Advisory Group.

“I think Fiddelke probably has more latitude to do things a little differently," Feldman said. “It’s only been one quarter or so, but they’ve definitely made some changes that have proven effective. The stores look better, in-stocks are better, and we saw better trends. We’re not fully turned around, but it’s on the right path.”

“It’s a new chapter at Target, and priority one through 10 is fueling growth,” Fiddelke said recently in announcing the appointment of Cara Sylvester as chief merchant. Fiddelke’s other priorities include improving the store experience and employing technology to key facets of the business.

Target Bounces Back In Q1 After Years Of Lackluster Returns

The activist investor group alleges that years of missteps have taken a toll on the retailer whose stock performance has lagged behind competitors such as Walmart and Costco.

But Target showed the first signs of improvement when it delivered on May 20 its Q1 results, including strong positive showings on revenue and earnings, and the first positive comparable sales growth in five quarters.

Feldman said Target listened to the investment community. “Right then, they definitely took a more aggressive approach to bringing newness into the stores and in-stocks and raising store standards. The stores look good.”

Kron is interested in issues of social responsibility in addition to stores. He said Costco stood by its DEI program, in the face of attacks to the program and the retailer didn’t suffer negative consequences.

“From a PC standpoint, I think Target wants to try to lay low when it comes to any lightning rod-type issues,” Feldman said. “They first backed down to the right, and then they backed down to the left, politically. They’re trying to just get back to the basics of retailing. They’re going to keep their nose down, focused on retailing, but still do what's right for the customer.”

“They know who their customer is,” Feldman added. “Target has a broad customer base that cuts across America. There’s ways to serve all the communities that shop in your store.”