Good morning! Carl’s Jr. brings back sexualized ad campaign approach, Chan Zuckerberg Initiative will not end DEI efforts, and Target’s DEI pivot turned off consumers. Have a restorative weekend.
– Shopping list. Amid corporate America’s rollback of DEI, some announcements caused more of a stir than others. One that hit a nerve was Target’s: The retailer said, four days into the Trump administration, that it was ending its diversity and inclusion programs.
Target’s fear was unsurprising given the Trump administration’s level of vitriol and legal threats toward DEI in both the federal government and the private sector. New attorney general Pam Bondi started her tenure this week with a memo that said the Justice Department would look at companies with DEI initiatives for “criminal investigation.”
But the abrupt shift from Target’s friendly and inclusive brand identity just a year ago left a sour taste with consumers. In May 2023, CEO Brian Cornell told Fortune that DEI had “fueled much of our growth” over nine years. While consumers weren’t happy about similar decisions rolling back DEI at Meta, Amazon, and Walmart, Target’s felt more personal. The $108 billion-in-revenue retailer’s brand had benefitted from its public-facing support of Black-owned businesses, proving out the theory that consumers like shopping a diverse array of products. Especially in a physical retailer where customers can touch and see products ranging from food to makeup to household items, going back on that commitment felt like a betrayal, to some, and simply a worse shopping experience to others.
Reactions have been passionate and complicated. Calls to boycott Target started immediately. Others called on shoppers to continue to support Black-owned brands independently and at Target’s stores—if a brand’s sales falter, it gives Target a further excuse to question the value of these brands, they argued. Independent e-commerce isn’t a solution for all brands, the Honey Pot founder Bea Dixon said; for those that sell inexpensive products, it often isn’t economically viable to sell direct-to-consumer. “I know it may seem like I’m defending Target, but I’m not,” Dixon wrote on Instagram. “I’m advocating for the small businesses that depend on this opportunity.”
Aurora James, who founded the Fifteen Percent Pledge in 2020 and convinced businesses to commit 15% of their shelf space to Black-owned brands, has spent the past few weeks unpacking why the tide has turned so quickly. “If it weren’t working, they wouldn’t be spending so much time trying to dismantle it,” she says. The Pledge’s contractual commitments are still up and running, and Sephora (which is owned by LVMH, whose family ownership attended the Trump inauguration) doubled down on its support for Black-owned brands at the Pledge’s annual gala this past weekend. James says she’s had lots of conversations with signers of the Pledge over the past couple weeks, but none have backed out.
Target never signed the Fifteen Percent Pledge, and instead announced the launch of its own initiative to support Black-owned brands—which could now be part of this rollback. Yesterday, Target was hit with a shareholder lawsuit alleging that the company failed to disclose the risks of its DEI efforts. (Target hasn’t commented on the suit and responded to Fortune’s request for comment with a fact sheet about their recent changes.)
“Consumer data has not changed,” James says. “We still know consumers are interested in shopping with their values.” What has changed is politics. And when a company’s commitment to DEI—or abandonment of DEI—is politically motivated, consumers can sniff it out.
Emma Hinchliffe
emma.hinchliffe@fortune.com
The Most Powerful Women Daily newsletter is Fortune’s daily briefing for and about the women leading the business world. Today’s edition was curated by Nina Ajemian. Subscribe here.
ALSO IN THE HEADLINES
- Falling in line. The NCAA changed its policy to bar trans women from women’s college sports following Trump’s executive order on gender. Some previously eligible athletes will no longer be allowed to play their sports competitively. CNN
- Back to bikinis and burgers. A new ad from Carl’s Jr. starring influencer Alix Earle marks a return to the burger chain’s sexualized advertising style. In 2017, the chain said it would no longer run racy ads because they distracted audiences from the food. Wall Street Journal
- No cause for concern. The Chan Zuckerberg Initiative (CZI), a charity founded by Mark Zuckerberg and Priscilla Chan, will not be matching Meta’s efforts to remove DEI. CZI says that it will remain unaffected by Meta’s decisions, although the nonprofit has followed suit when the tech giant has made changes in the past. TechCrunch
- Banking abuse. The late financier Evelyn de Rothschild was accused of sexual assault and harassment by several women who worked at NM Rothschild. Rothschild & Co declined to answer whether there was information regarding his misconduct, and his family did not respond to a request for comment. Guardian
- Schmidt takes a stake. Wendy Schmidt, president of the Schmidt Family Foundation and wife of former Google CEO Eric Schmidt, acquired a majority stake in Jigsaw Productions. Following Schmidt’s investment, the documentary production company will tell more climate change and ocean health stories, while also expanding its distribution options, like with VR experiences. New York Times
MOVERS AND SHAKERS
Salesforce named Robin Washington to the new role of president and chief operating and financial officer. Washington is currently the company’s board director and lead independent director; previously, she was EVP and CFO of Gilead Sciences.
L'Oréal heiress Francoise Bettencourt Meyers will retire from the L’Oreal board, where she served as vice-chairman.
Carol Hamilton will retire from L’Oreal Groupe after 40 years at the company. She serves as U.S. president of acquisitions.
Andrea Mitchell is stepping down as MSNBC anchor chair; she was at the desk for almost 17 years. Mitchell will continue to serve as NBC News' chief Washington correspondent and chief foreign affairs correspondent.
Actian, a data analytics platform, named Emma McGrattan CTO. She was previously the company’s SVP of engineering and product.
Commonfund OCIO, which provides CIO services for nonprofits, appointed Julia Mord as CIO. Most recently, she was deputy chief investment officer at Tulane University’s Investment Management Office.
Omni Workspace, a provider of interior spaces across industries, named Sarah Wandschneider chief people officer. She most recently served as VP of HR at Canon Medical Informatics.
Get Well, a patient engagement platform, named Laura Semlies chief transformation officer. Most recently, she was a partner at McKinsey & Company in its healthcare practice.
Piermont Bank appointed Carla Brooks and Cyndie Chang to its board of directors. Brooks is a senior managing director on Commerce Street Investment Management’s private equity team. Chang is the Los Angeles managing partner at Duane Morris.
ON MY RADAR
The NFL’s flawed DEI program still beats what most companies are doing Bloomberg
Three months after Missouri voted to make abortion legal, access is still being blocked ProPublica
The strategist behind the viral #WinWithBlackWomen movement Time
PARTING WORDS
“There are points in the creative process when you are kind of operating on faith, and it’s scary.”
— Instacart CMO Laura Jones on the company’s first Super Bowl ad