Feb 3 (Reuters) - Target ( TGT ) has been sued for

allegedly concealing the risks of its diversity and social

initiatives, leading to a backlash that caused customers to flee

and the stock price of the Minneapolis-based retailer to

plummet.

In a proposed class action on Friday, shareholders led by

the City of Riviera Beach Police Pension Fund in Florida said

Target ( TGT ) defrauded them into paying inflated prices for its stock

and unknowingly supporting management's "misuse of investor

funds to serve political and social goals."

The lawsuit said the retailer, CEO Brian Cornell and other

officials failed to disclose the risk of consumer boycotts

stemming from Target's ( TGT ) Environmental, Social and Governance and

Diversity, Equity and Inclusion initiatives.

It also said Target ( TGT ) concealed backlash from its May 2023

Pride Month campaign, which led the retailer to remove some

LGBTQ-themed merchandise after in-store confrontations led some

employees to fear for their safety.

Target's ( TGT ) share price fell 22% on Nov. 20, 2024, wiping out

about $15.7 billion of market value, after it forecast

disappointing profit and holiday sales.

Shareholders said Target's ( TGT ) underperformance stood "in stark

contrast" to results at rival Walmart ( WMT ), and reflected

"continued backlash from its campaigns."

Target ( TGT ) did not immediately respond on Monday to requests for

comment.

The lawsuit in the Fort Myers, Florida federal court seeks

damages for Target ( TGT ) shareholders from Aug. 26, 2022 to Nov. 19,

2024.

It was filed after Target ( TGT ) said on Jan. 24 it would end DEI

initiatives this year, including a program to support

Black-owned businesses that it adopted following the 2020 murder

of George Floyd by a Minneapolis police officer.

Target ( TGT ) joined Walmart ( WMT ), Amazon.com ( AMZN ) and some other

prominent companies to scale back such initiatives, which have

been attacked by many conservatives including U.S. President

Donald Trump.

The case is City of Riviera Beach Police Pension Fund v

Target Corp ( TGT ) et al, U.S. District Court, Middle District of

Florida, No. 25-00085.