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[May 05, 2014]
Gregg Steinhafel Steps Down As CEO Of Target
(Benzinga Lightning Feed Via Acquire Media NewsEdge) It was announced Monday morning that Gregg Steinhafel will step down as Chairman, President and CEO of Target (NYSE: TGT). CFO John Mulligan will take the role of interim CEO as the company looks for a new executive and Roxanne Austin will replace Steinhafel as chairman.
Steinhafel had been with the company for over 35 years. He became president in 1999 before also taking the role of CEO in 2008.
There are two related catalysts that are likely cause for his removal. Sales for the fiscal year ending January 31, 2014, dropped 0.97 percent year-over-year and income for the year fell 52.16 percent. This is partly related to the massive data theft that comprised credit card information for 40 million customers and other information (home address, phone number) from 70 million customers.
The press release announcing his resignation stated that he holds himself personally responsible for the incident.
Related: Benzinga Weekly Preview: Earnings Season Continues, Albeit A Tad Slower Belus Capital CEO Brian Sozzi is critical of the company for not replacing Steinhafel before the spring selling season and before Target began to plan for the upcoming holiday season -- including back-to-school time. Sozzi also notes that traffic has not increased for the first quarter, despite increased price competitiveness and that its Canada business is still in a bad state.
"I really believe there is Canadian component to Target's decision today," Sozzi told Benzinga. "Since Canada was pitched as the next mega-business for Target years back and has not delivered, it was time for Steinhafel to pay for that error in judgement." Sozzi thinks the board will look for an outsider with a global perspective as its next CEO.
Shares of Target have taken a hit following the news and were last trading at $61.43, down 0.94 percent.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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