Target names Cornell as new CEO

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MINNEAPOLIS — For the first time in its history Target Corp. has appointed a chief executive officer from outside the company, hiring Brian Cornell as chairman and CEO.

Brian Cornell

Cornell, 55, is a former president and CEO of Sam’s Club and most recently was CEO of PepsiCo Americas Foods, the largest of PepsiCo Inc.’s four divisions.

To Target, he brings an impressive record compiled over 30 years at some of the world’s leading retail and consumer products companies. At PepsiCo, he was responsible for Frito-Lay North America, Quaker Foods, and PepsiCo’s entire Latin America food and snack business. PepsiCo Americas Foods is the

Before rejoining PepsiCo, where he had worked earlier in his career, in 2012, Cornell had been president and CEO of Walmart’s Sam’s Club division, where he led changes that produced significant improvement in sales and profits. He also served as CEO at Michaels Stores Inc. and before that was executive vice president and chief marketing officer at Safeway Inc.

"As we seek to aggressively move Target forward and establish the company as a top omni-channel retailer, we focused on identifying an extraordinary leader who could bring vision, focus and a wealth of experience to our transformation," says Roxanne Austin, interim non-executive chairman. "The board is confident that Brian’s diverse and broad experience in retail and consumer products as well as his passion for leading high-performing teams will propel Target forward."

The discount store operator’s chief financial officer, John Mulligan, had served as interim CEO since Gregg Steinhafel stepped down as chairman, president and CEO in May.

After succeeding Robert Ulrich in 2008, Steinhafel’s tenure was marked by a succession of setbacks, including decelerated sales growth in the United States, an unsuccessful relaunch of Target.com, a failed entry into the Canadian market and, finally, a massive data breach during last year’s holiday season that crippled year-end sales.

Cornell faces major challenges in attempting to turn Target around. Some analysts have suggested that the retailer should fold its unsuccessful Canadian operation, which has generated operating losses of $1.64 billion since 2011.

But Target’s problems are not limited to Canada. Despite the development and rollout of its PFresh format, designed to increase customer traffic with the offer of a limited grocery assortment that includes some fresh food, the chain has struggled in recent years to sustain robust sales growth in the United States.

The success of another format initiative launched under Steinhafel, City Target, is unclear. After opening eight of the stores, which have a smaller footprint and an edited product assortment, there are apparently no plans to open any more locations during 2014, according to published reports.

What Cornell can draw on is Target’s legacy of sharp, differentiated merchandising and perhaps the best marketing in mass market retailing.

"I am honored and humbled to join Target as the first CEO hired from outside the company," he says. "I am committed to empowering this talented team to realize its full potential, lead change and strengthen the love guests have for this brand. As we create the Target of tomorrow, I will focus on our current business performance in both the U.S. and Canada, and on how we accelerate our omnichannel transformation."

Pharmacy remains one of Target’s strengths. The discounter is the nation’s seventh-largest retail pharmacy operator, with 1,665 pharmacies and estimated prescription sales of $4.9 billion.


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