The “stunning collapse” of retail giant Target following the controversial LGBT Pride Month product release should serve as a warning to CEOs considering waking up marketing campaigns, Shark Tank star Kevin O’Leary warned.
Target has lost more than $4 billion in market value in just under three weeks after the scandal, which included offering a “tuck-in-friendly” female swimwear line.
O’Leary said the “unprecedented” decline shows the company’s failure to prioritize its investors over appeasing modern wake standards, including listening to diversity officers rather than business-savvy executives.
“On the one hand, companies want to show their support for diversity in all mandates that society openly discusses,” he said. Fox news.
“On the other hand, a company’s job — especially from an investor’s perspective — and those who are retired, say, who own the S&P 500 or Target stocks — are concerned that they might get their way in terms of what the main objective is: your customers, your employees and your shareholders.’
Shark Tank star Kevin O’Leary (right) said Target’s stunning collapse should be a warning to other awakened CEOs
O’Leary’s comments come as several major US companies, including Target, Adidas and Bud Light, are experiencing significant backlash from advertising campaigns.
The Shark Tank investor warned that continued efforts to force ideological marketing on customers will see more companies suffer financially.
“The stunning collapse in Target’s market cap is almost unprecedented for its own stock in 20 years, and how this happened is currently being scrutinized by many other boards,” he said.
“If you start to get too far or too far away from the primary mandate, the market has proven to really, really punish you.
“And it’s shaken up all kinds of shelves.”
O’Leary said customer outrage over recent controversies, such as Bud Light’s disastrous campaign starring trans star Dylan Mulvaney, is amplified by social media.
“This shows the power of something most boards of directors have never thought of: social media,” he said.
“If you lose control of the message through social media, which is plainly obvious, you better figure out what message you’re putting out before it ever gets there.
“We almost need a new board committee. We have risk commissions, compensation commissions, we have compliance commissions.
“We need a communications and media committee to advise the rest of the board who don’t even have a Twitter account or don’t have Facebook or use LinkedIn.”
Target caused a backlash after releasing its product selection for LGBT Pride month
He said social media illiterate executives still don’t understand the “risks inherent in pushing such ads.”
While admitted roles such as diversity officers are here to stay, O’Leary urged companies to put their bottom line back at the top of their priority list.
“I don’t think you’ll find many people saying, ‘Oh, let’s not have diversity officers.’ I think that boat has sailed,’ he said.
“But what they do with their budget now really matters and the risks they take on the company because of the power of uncontrolled social media are clearly measurable.
“When you lose $11 billion in market cap, there are a lot of unhappy cowboys. They are called your investors.’
This included the public humiliation of the once leading beer brand Bud Light, which has gone under financially in the wake of its partnership with Mulvaney.
“It took decades to make the American beer and exactly 32 hours to destroy it,” he added.
The women’s swimsuit collection included a label advertising the “pleat-friendly construction” and “extra crotch” coverage
Since partnering with Mulvaney, Bud Light’s parent company, Anheuser-Busch, has faced boycotts and declining sales
The fallout from Anheuser Busch’s decision to partner with Mulvaney caused the company to lose an astonishing $27 billion in just a few months.
And the knock-on effect was felt over Memorial Day weekend, as customers shared videos of unwanted cases of Bud Light sitting untouched on shelves across the country.
The boycott has reportedly spread to independent wholesalers, who have seen their sales drop to $2,000 a month as customers shy away from the brand.