Yahoo Lifestyle How Companies Like Target, E.l.f. and Levi’s Are Responding to Trump’s Anti-DEI Campaign
If retailers are good at anything, it’s knowing which way the wind blows.
They spend all day, every day trying to figure out what customers want and how to give it to them.
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But the wind is blowing strangely now that Donald Trump is back in the White House as President and officially fighting against diversity, equity and inclusion.
While the tariffs that fashion has been worrying over since November have finally come, with new levies on China and the threat of tariffs in 30 days on Canada and Mexico, they are a relatively straightforward business challenge.
The assault on DEI is a stickier problem for retailers and their chief executive officers, who have been defining and redefining their roles on the fly.
Are CEOs civic leaders? Culture warriors? Fast followers of the zeitgeist? Or businesspeople looking out for the interests of their companies and shareholders? Something else?
The fight against DEI — a movement embraced so strongly by the industry — is a chance for CEOs to decide just where they and their companies stand.
Some are staying right where they are, including E.l.f. Beauty, Levi Strauss & Co. and Costco.
“We aren’t reacting to the current rancor around inclusivity because it’s not a new conversation at E.l.f. Beauty,” Tarang Amin, chairman and CEO, told WWD. “Positivity, inclusivity and accessibility is essential to who we are and power what we do. Our community knows what they are going to get from us: the best of beauty for every eye, lip and face, with an emphasis on ‘every.’
“There’s no diversity department at E.l.f.,” Amin said. “We, as a passionate team of owners, are intentional in ensuring we have the best talent and a wide variety of perspectives to run a better business — and that naturally leads to a highly inclusive workforce.” Forty-four percent of E.l.f.’s workforce is diverse.
Likewise, Michelle Gass, president and CEO of Levi’s, said in an interview: “We’ve been committed to diversity and inclusion for literally decades, and it’s the core to who we are. So our commitment remains unchanged. We will do what’s right for our people, for our business. And at the end of the day, building a diverse and inclusive workplace helps us deliver stronger results.”
Others have made a hard pivot from DEI to belonging, including Walmart Inc. and Target Corp., both of which said they would no longer contribute to The Human Rights Campaign’s Corporate Equality Index.
“Our purpose, to help people save money and live better, has been at our core since our founding 62 years ago and continues to guide us today,” Walmart said in November. “We can deliver on it because we are willing to change alongside our associates and customers who represent all of America. We’ve been on a journey and know we aren’t perfect, but every decision comes from a place of wanting to foster a sense of belonging.”
Target also zeroed in on the importance of staying in tune with the moment.
“As a retailer that serves millions of consumers every day, we understand the importance of staying in step with the evolving external landscape, now and in the future — all in service of driving Target’s growth and winning together,” said Kiera Fernandez, executive vice president and chief community impact and equity officer, in a memo to the company.
But just what meaning retailers should take from the moment is something each company and board is trying to figure out for themselves.
Following the Consumer
Consultant Jonathan Low, a partner at Predictiv who specializes in gauging the impact of intangibles in business, said companies are doing some hard-nosed analysis and deciding whether to fight the DEI battle up-front or make for a tactical retreat.
“I would argue that company C-suite executives were not really culture warriors,” Low said. “They were going along with what they then perceived was the prevailing ethos. The prevailing ethos appears to have changed. So now they’re going along with the new prevailing ethos, and they’ll tack to starboard again when all the indications are that that’s the smart thing to do.
“It sounds very cynical, but I think it’s just business doing what business has always done, which is to protect the core brand, protect the institution, and make opportunistic shifts when necessary,” he said. “I think they are going to continue to follow their consumers.”
But while a small majority of voters leaned toward Trump in the last election, the reaction of employees and consumers to diversity programs is another matter entirely.
A 2023 survey by the Pew Research Center found that 56 percent of U.S. adults felt that focusing on more DEI at work was a good thing. Twenty-eight percent of respondents were neutral on the topic and only 16 percent felt DEI was a bad thing.
That would seem to give brands some room to navigate.
While Laurence Lim, founder and managing director of the Cherry Blossoms Intercultural Branding marketing agency, called the fight against DEI a “social tragedy,” she said it also opened up “huge and unique opportunities for brands.”
“Beauty brands and fashion brands, in particular, have always been pioneering in terms of progressive values, inclusivity and diversity,” Lim said. “The moral void that is going to be created by the Trump decision can be filled in by these brands.
“In the U.S., you are what you buy,” she said. “The brands that you choose, it’s a way to define yourself, to define your identity, and to define your system of values, which is more and more important for the younger generation. It’s ethical consumption that defines the young generation, it’s all about embracing kaleidoscopic identities.”
Trump 2.0
C-suites across the industry are paying close attention to Trump right now, but they won’t forget about consumers.
“There’s a lot of fear right now. Trump 2.0 is already very, very different from Trump 1.0,” said one former CEO. “These are ‘lightning rod’ issues and I don’t think anyone wants to put themselves in the crosshairs. Most companies have made meaningful commitments in these areas, internally and externally. Once you’ve committed, it’s hard to completely back away from these commitments. Especially if you truly believe that progress in these areas are good for business.
“You’re going to see the intent of the programs continue; but target setting, compensation around targets, that will likely go away,” the CEO said.
Black Lives Matter
Fashion and retail really embraced DEI after the 2020 murder of George Floyd supercharged the Black Lives Matter movement and sent more than 15 million people into the streets to protest racial injustice.
While a sense of moral justice no doubt played a part, companies also made the business case for DEI, emphasizing how it was important to have the people who make, market and sell the goods reflect the end consumer.
Correcting seismic racism was always going to be a big job and DEI programs were seen as a start, working to raise up underrepresented groups.
But where companies looked for progress in DEI, Trump saw something else.
The Executive Order
In his first flurry of executive orders, Trump said “critical and influential institutions of American society…have adopted and actively use dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion.’”
He outlawed DEI in the federal government and issued and ordered government agencies to each identify nine private corporations or other groups that can be targeted with “potential civil compliance investigations.”
Susan Scafidi, founder and director at the Fashion Law Institute at Fordham Law School, said Trump seems to be looking to make examples of some larger organizations and assuming the smaller ones will fall in line.
“DEI in its current form may die, but…we’re likely to see an evolution in language and form,”
Scafidi said. “Employers can define ‘merit, aptitude, hard work and determination’ — the language of the executive order — in many ways. In the case of the fashion industry, the steps we’ve already taken toward creating a diverse workforce and appealing to a range of consumers may be self-reinforcing.
“Some specific programs, such as internships focused on minority groups or preferences for minority- or women-owned businesses, will likely have to be redefined,” she said.
Measuring Progress
As fashion adjusts and is, in at least in some instances, quieter on the issue, worries are going about what happens to the broader aims of DEI.
“How can you hold companies accountable for outcomes without proper measurement?” said Belén Satorre, associate director of ESG-Human Rights at the S-RM consultancy.
“The U.S. has been a leader on diversity, equality and inclusion because of their social movements,” Satorre said. “Scaling back DEI policies is definitely a step backward on all the progress that U.S. companies have made in the past years. What I fear is probably the budgets will be reduced and there will be less resources and accountability around the communications side of DEI.”
Going After Costco
While Trump takes on DEI in the government, activists have pushed against companies.
The National Center for Public Policy Research likewise made the hard sell to Costco shareholders as it pushed the company to study the risks of maintaining its diversity program.
“DEI is illegal, immoral and detrimental to the shareholder value,” the group said at Costco’s annual meeting last month. “Diversity, equity and inclusion may sound benign on the surface, but in reality it is weaponized language concealing a radical Marxist agenda. Take the word diverse for example, which up until 5 minutes ago meant how heterogeneous a group of people is. But now in woke speak, it’s used to describe individuals belonging to specific demographic groups that are considered oppressed, or more plainly, it just means someone who is not a straight white male.”
Tony James, chairman of Costco, stood his ground.
“We have always been purposefully nonpolitical and a welcoming workforce has been integral to the company’s culture and values since its founding,” James said. “Our commitment to inclusion, however, does not and has never included quotas or systematic preferences, nor does it mean compromising merit.”
Investors backed him, with 98 percent of the votes at the meeting shooting down the proposal to study the risks of having a diversity program.
‘We Belong’
There have been other signs that the sentiment behind DEI is still going strong.
The Fifteen Percent Pledge held its annual gala on Saturday, raising $3 million in its bid to get retailers to commit 15 percent of their purchasing power to Black-owned businesses, syncing up shelf space with simple demographics.
Aurora James, who founded the group in 2020, told the celebrity-filled crowd: “Each and every one of us, our stories, our pasts, our cultures and identities, are part of the fabric that makes America great. Dare I say more than great, we make it f–king spectacular. We are nobody’s DEI hire. This country in its best form is a product of each of our beautiful and individual contributions. Never, ever, ever let another person tell you otherwise. We belong, you belong, all of our children belong here.”
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