Landlords Claim Target Is Using Crime To Deflect From Its Other Problems

Landlords of shuttered Target stores are striking back against the retailer after it cited rampant crime as the reason for closing nine stores.

In a statement last week, Target said its decision followed a wave of shoplifting that compromised safety while simultaneously hindering profits. But owners of affected shopping centers told Bloomberg that hits to Target’s bottom line are driven by more factors than the company is willing to admit.

“Our team continues to face an unacceptable amount of retail theft and organized retail crime,” Target CEO Brian Cornell said during the company's most recent earnings call in August. “And unfortunately, safety incidents associated with theft are moving in the wrong direction.”

Target’s decision to shut down its Harlem, New York, store came as a surprise to landlord David Blumenfeld, principal at Blumenfeld Development Group, as the company had never raised concerns about theft, he told Bloomberg.

Target has already signed a new lease for a smaller location nearby, undercutting its claims that crime is the issue, he added. Instead, Blumenfeld said, the company is coming to terms with its inability to successfully operate large-format stores in big cities.

Shoplifting and vandalism were also cited as reasons behind Target’s decision to shutter its store in Pittsburg, California, despite having 18 years remaining on its lease.

The company had never complained about crime and was in talks to extend its lease, Sierra Pacific Properties President Doug Messner told Bloomberg. Target abruptly pulled out of negotiations in an attempt to strong-arm the state into doing more about organized retail crime, he claimed.

U.S. retailers such as Walmart, Dollar Tree and Nordstrom have been vocal about the impact of organized retail crime on profits, but Target is the first to use theft as a reason to close stores.

Target stores saw a 120% increase in theft incidents involving violence or violent threats during the first five months of this year, Cornell said during the earnings call.

When taken as a percentage of total retail sales in 2022, shrink, or losses due to theft, accounted for $112B in losses, up from nearly $94B in 2021, according to a National Retail Federation survey released in late September.

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