Inside This Issue - News
Target moves to shake things up
June 2nd, 2014
MINNEAPOLIS – Under the leadership of interim chief executive officer John Mulligan, Target Corp. is taking action to turn itself around from the effects of a massive data breach and big losses in Canada.
The moves include leadership changes in the United States and the replacement of the president of Target Canada.
Three senior merchandising executives — including former senior vice president of health and beauty José Barra — have been promoted, and the merchandising team has been realigned. Barra has been named executive vice president of essentials and hard lines; he remains responsible for Target’s pharmacy and health and beauty aids businesses.
Also promoted were Trish Adams, to executive vice president of apparel and home, and Keri Jones, to executive vice president of merchandising planning and operations.
“Moving more quickly to bring bold, innovative ideas to the marketplace will help us connect with our guests in more meaningful ways,” said Kathee Tesija, Target’s chief merchandising and supply chain officer.
Target also fired Target Canada president Tony Fisher. Taking his place is Mark Schindele, senior vice president of merchandising operations. Schindele is credited with playing an integral role in developing new store formats for the retailer, including PFresh, CityTarget and Target Express. He will report to Tesija, whose responsibilities include Target Canada.
“Target is committed to making more rapid progress in Canada, and I am personally very excited about working alongside the team to improve operations and deliver a Target experience that will earn us the trust and loyalty of our Canadian guests,” Schindele said.
Target also announced that it would create a new nonexecutive chairman role in Canada to support Schindele and make sure Target Canada’s strategies and tactics fit the needs of the Canadian marketplace.
The moves at Target came just weeks after the departure of chairman, president and chief executive Gregg Steinhafel, and just days before Target announced its first quarter results.
Target reported that its first quarter net earnings fell by 16%. Sales increased 0.2% to $16.7 billion from $16.6 billion last year, reflecting the contribution from new stores, partially offset by a 0.3% decline in comparable-store sales.
“First quarter financial performance in both our U.S. and Canadian segments was in line with expectations, reflecting the benefit of continued recovery from the data breach and early signs of improvement in our Canada operations,” Mulligan said. “While we are pleased with this momentum, we need to move more quickly. As a result, we have made changes to our management team and are investing additional resources to drive U.S. traffic and sales, improve our Canadian operations and advance our ongoing digital transformation. We have updated our 2014 earnings expectations to reflect the impact of these investments and believe that they position Target for accelerated profitable growth as a leading omnichannel retailer.”
Target lowered its adjusted full-year earnings forecast to $3.60 to $3.90 per share, down from $3.85 to $4.15 per share. The change is attributed to increased discounts to help boost store traffic, as well as to investments in the retailer’s e-commerce business. Target reported that it did see increased store traffic in February and March, despite bad weather.