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After transgender bathroom backlash, Target to spend $20M on private stalls

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Target is spending $20 million to add more private, single-stall bathrooms to its stores, following backlash over its firm stance on inclusivity for transgender shoppers.

The Minneapolis-based retailer caused a stir this passed April when it re-affirmed its already existing bathroom policy which states that transgender shoppers can use the bathroom with which they identify.

But in a conference call with media after Target reported in-store sales fell 1.1 percent in the second quarter, Chief Financial Officer Cathy Smith commented: "It’s clear that some of our guests like and some dislike our inclusive bathroom policy."

She revealed the company would be investing $20 million to add private bathrooms that can be locked in more stores.

Fortune describes the move as "making concessions to customers displeased with the bathroom policy," noting that many Target stores already have single-stall bathrooms, but more will be added by November and after the holiday season.

Groups including The American Family Association called for a boycott of the retailer in the wake of Target's April statement, in which it said "inclusivity" is one of its core beliefs.

Smith did not say if the controversy had any impact on sales or traffic, but the Daily Beast reports analysts believe it is one of the causes of the second quarter decline.

Two areas which definitely did have an impact was the sale of Target pharmacies to CVS and the continued downturn in electronics.

CVS/Apple woes contribute to poor results

Shifting over Target pharmacies to CVS has been listed as a major reason for the dip in business and foot traffic into stores, as described in the Q2 results released Wednesday.

Target CEO Brian Cornell said CVS will be launching an aggressive marketing strategy to lure more shoppers back to the in-store pharmacies it now runs.

Also taking a major toll on sales was the ongoing dip in sales for Apple products, with Apple sales in Target falling 20 percent in the second quarter – accounting for a third of the double-digit decline in electronics sales.

Cornell said this cannot solely be explained by the gap between new iPhone releases, saying it's a broader issue with Apple producers as a whole, but it was working with the tech giant to come up with strategies to boost in-store sales and its product range.

On the plus side, there was good performance in the core categories of apparel, home and toys.

A particular success has been Target's range of the "Cat and Jack" kids clothing line, which had growth in the double digits since its launch, when compared with launches of previous kids brands.

Smith said it has proved to be Target's biggest own brand July rollout.

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