PORTLAND, Ore. — A months-long investigation by CNBC found that Target's explanation for closing several storefronts nationwide, including three in Portland, might be a smokescreen for economic problems unrelated to theft and shoplifting.
In September, Target announced the closure of nine stores in four states, citing ongoing problems with theft and "organized retail crime." Those stores were located in Portland, Seattle, San Francisco and New York City.
In Portland, these included the Galleria location downtown, as well as the small-format locations on Southeast Powell and in the Hollywood District on Northeast Halsey.
"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 said in a statement earlier this year. "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."
But CNBC's "findings cast doubt on Target’s explanation for the store closures and raise questions about whether the company’s announcement was designed to advance its legislative agenda and obscure poor financial performance."
The investigation found that the corporation continued operating stores that had better foot traffic or higher median incomes, even though those locations saw more theft and violence. In those areas, CNBC added, the area's "police departments may be better funded due to higher tax bases, and shoppers may have more to spend on discretionary goods."
Those nine shuttered locations, the investigation continued, had fewer reported crimes than the ones it chose to keep open nearby.
According to CNBC's investigation, many of the shuttered locations were "small-format" stores that the company opened in order to expand its reach in dense, urban areas.
Allison Sliter goes downtown regularly for an appointment, and used to visit the Galleria Target store. She feels the company dropped the ball communicating about the closure.
"Why can’t you just say it’s not making enough sales for what it costs as opposed to saying it’s some sort of organized crime, it was dishonest and I don’t understand why it was necessary," said Sliter.
In the investigation, retail executive Mark Cohen — who previously served as the CEO of Sears Canada, Bradlees and Lazarus department stores — also questioned whether the claims about theft were designed to distract from the retailer's struggles, as Target's sales had fallen from the previous year in both its second and third quarters.
"They implied that the only reason they were closing the stores was because of theft. That may or may not be true. My guess is: Not true," he said.
This is in line with what KGW's Kyle Iboshi observed when Target's announcement came in: Portland crime data shows that the three stores didn't necessarily have the highest crime rates. They were small-format stores, and those can't absorb the losses that larger Target locations can — their profit margins are already too thin. Even if they see fewer thefts than larger stores, the company has an incentive to shut them down first.
Chris Cochrane, who works in the Galleria building, feels the message Target sent on the store closings was out of context, and hurts a city that is rebounding from several challenges.
"I think if you’re not giving people the full message, then they’re getting the wrong idea, and then, people are getting the wrong idea about coming downtown to do things also, so I just think that’s unfortunate," said Cochrane.
In response to the investigation, Target spokesperson Jim Joice told CNBC that as a growth company, Target is “continuously opening new stores, initiating remodels, investing in our team and infrastructure, and refining our operations as we seek to deliver the shopping experience that people have come to expect of Target.”