Markets
TGT

Target to Shell Out $10M for Settling Class Action Lawsuit - Analyst Blog

As per sources, Target CorporationTGT will be shelling out $10 million to settle a class action lawsuit pertaining to the massive data breach that occurred during the holiday season in 2013. The money will be deposited in an escrow account set up under federal supervision and plaintiffs will be paid $10,000 each. All the claims will be processed through a website, solely set up for the purpose.

Moreover, the company has agreed to adopt several security measures proposed by the petitioners. These actions include appointment of a chief information security officer alongside maintenance of a written information security program.

In 2013, Target faced its worst security breach when credit and debit card data of approximately 70 million customers were stolen by hackers. The theft occurred during the holiday season, from the day before Thanksgiving up to Dec 15. The company publicly acknowledged the breach after four days on Dec 19, 2013. As expected, the breach had shaken consumer confidence resulting in lesser footfall and a public relations nightmare for the company.

Ever since, the company is trying to mend its image. It has adopted extensive customer friendly initiatives that include expansion of omni channel capacities, enhancing merchandise assortment as well as reducing minimum value for free shipping to $25. Moreover, Target has extended its return window to one year from the date of purchase, which is valid for products from the company's all 32 owned and exclusive brands.

In a latest labor friendly move, sources claim that Target has raised the minimum wage for its workers to $9 an hour, following the development at Wal-Mart Stores Inc. WMT .

On Feb 19, 2015, Wal-Mart announced that it would spend around $1 billion to raise wages of approximately 500,000 full-time and part-time associates at Wal-Mart U.S. stores and Sam's Clubs in the first half of fiscal 2016. Wal-Mart stated that it will start raising entry level wages to at least $9 an hour from Apr 2015, which will be further increased to $10 an hour in Feb 2016. The $9 an hour rate would be $1.75 more than the federal minimum wage rate.

Availability of jobs not only led to drop in unemployment rates but also gave workers more choices, thereby driving raise in wages.

Wal-Mart's pay hike created a ripple effect in the retail industry, pressuring other retailers to follow suit. Apart from Target, The TJX Companies, Inc. TJX also raised its minimum wage to $9 per hour.

Target currently carries a Zacks Rank #3 (Hold). Other stock worth consideration in the same sector includes Burlington Stores, Inc. BURL which carries a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

TARGET CORP (TGT): Free Stock Analysis Report

WAL-MART STORES (WMT): Free Stock Analysis Report

TJX COS INC NEW (TJX): Free Stock Analysis Report

BURLINGTON STRS (BURL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TGT WMT TJX BURL

Other Topics

Stocks

Latest Markets Videos