One senior research analyst says Target Corp.’s decision to close nine stores due to shrink-related issues should act as a sign for policymakers to take action. 

On Tuesday, Target said it is closing nine stores across the U.S. due to increases in retail theft, Bloomberg News reported, noting that the stores will close on Oct. 21. Michael Baker, a managing director and senior research analyst at D.A. Davidson & Co., said in an interview with BNN Bloomberg Wednesday that closing the nine stores “will be immaterial” to shrink losses but is a “step in the right direction.” 

“As much as anything, I think it's certainly an economic decision to close these doors,” Baker said.

“But it's also a signal telling regulators, ‘Hey, we need help, we need policymakers to help us with this organized retail theft and if not, we can't stay economically viable in these areas and stores will close.”

He also said Target is being impacted by difficult circumstances for certain retailers.

“It's a tough time to own discretionary retailers right now, for sure. We think Target is getting caught up in that,” Baker said.

Additionally, Baker noted that Target has not “performed very well this year” amid weaker-than-expected sales.