A working life spent on-Target

Bob Ulrich isn't the kind of guy you're likely to see clicking his cowboy boots in midair when he retires as CEO of Target Corp.

His departure Wednesday is dictated not by an eagerness for a life of leisure, but by a turn of the calendar. Three days ago, Ulrich celebrated his 65th birthday, hitting Target's mandatory retirement age for executives.

"The biggest loser in this is Bob, because he just loves his job so much," said Bob McMahon, a retired Target vice president of real estate and Ulrich's trusted friend. "It's going to be hard for him not to go into work every day. He still has so much energy."

Ulrich has worked the entire arc of his career at the company now known as Target, starting as a merchandise trainee at Dayton's department store in 1967.

As Ulrich prepares to pass the baton to Target President Gregg Steinhafel, the handoff is quintessential Ulrich, and quintessential Target: consistent, measured and well-thought-out.

Steinhafel and Ulrich have worked together for 30 years, with Steinhafel serving as president since 1999. No one expects wholesale changes.

Nonetheless, the changing of the guard marks a significant milestone for the Minneapolis-based retailer. Ulrich was just the fourth CEO since 1967, when the company went public. Under him, Target grew from a modest Midwestern discount operation into one of country's most innovative, admired and successful companies.

"He's very competitive and very aggressive in terms of being first to the market and capitalizing on trends, and getting out at the appropriate time to drive the cycle of innovation," said Jeff Klinefelter, an analyst with Piper Jaffray & Co. in Minneapolis who also worked six years at Target.

"At the same time, Bob Ulrich appreciates his limitations. He's hired very talented, very creative people to fill in the blanks."

Intensely private and famously media-shy, Ulrich declined to be interviewed for this report.

A company lifer

Considered a savvy merchandiser and a stickler for details, Ulrich methodically worked his way up the executive ranks. In 1984, he became president of Target, then a unit of Dayton Hudson Corp. At the time, there were just 80 stores. He became Target CEO in 1987.

Then, in what some would later describe as a "boardroom brawl," Ulrich pushed his way into the CEO's spot at Dayton Hudson in 1994 by making a convincing case to cut costs and abandon the measured department-store approach to decisionmaking. The Targetization of Dayton was underway.

"Speed is life," he told investors at his first annual meeting after becoming CEO. Get the critical data, take risks, move on quickly after failures.

Today, Target Corp. is the nation's No. 2 discount retailer, with $59 billion in sales, more than 366,000 employees and 1,613 stores. Target's stock price has risen from a split-adjusted $6.31 when Ulrich became CEO to $53.98 Friday. Sales have quadrupled, and net earnings have increased ninefold.

"Under him, Target really started getting focused," said Stan Pohmer, a Twin Cities retail consultant who was a senior buyer at Target from 1983 to 1996. Pohmer said he pitched dozens of ideas and business concepts to Ulrich and his leadership team. "Besides being a good merchandiser, Bob took the time to really understand the total business. He understood you couldn't be all things to all people."

Ulrich started studying consumer psychographics as well as demographics, to learn not just how old customers were or where they lived and worked, but what made them tick. Target quit carrying hunting rifles, archery equipment and automotive brake pads.

Designers such as Michael Graves and Isaac Mizrahi helped drive Target's affordable-fashion message.

In 1990, years before selling naming rights became standard for sports arenas, Target arranged to have its name and logo put on the new Timberwolves arena in Minneapolis. Ulrich clinched the deal for a mere $250,000 a year.

Under Ulrich, Target maintained its tradition of giving away 5 percent of pretax income to charity, and in 1997 it started a program that allowed credit-card customers to give 1 percent of their purchase amounts to a school of their choosing.

Ulrich set high expectations for his managers, Pohmer said, but he "inspected what he expected." Ulrich showed up at stores unannounced, and instituted a detailed job review system. He measured and quantified everything.

"His leadership style and his work ethic are so fully ingrained in the culture of the company, he's going to have influence there for many years, whether he's there or not," said McMahon, the former vice president.

But the company that has been widely imitated has not been universally loved.

It has been chided for furthering urban sprawl, and for public subsidies for a parking ramp at its downtown Minneapolis store. A proposed $2 billion corporate megacampus in Brooklyn Park rankled some politicians and community activists.

Labor troubles

In the past decade, Target has settled lawsuits concerning working conditions at some of its factories overseas and for alleged license and copyright violations of its products.

Labor leaders have said that Target's charitable generosity doesn't extend to pay and benefits for its hourly workers.

"Target has been given a pass because of their persona as a charitable company," said Bernie Hess, an organizer with the United Food and Commercial Workers Local 789 in St. Paul. "They'll give $30,000 for a new park, but the community leaders don't demand a living wage, health benefits and a little something when you retire."

Some criticism came from Wall Street. Analysts said Ulrich was slow to get into the grocery business -- and to unload the long-struggling Mervyn's chain, which didn't happen until 2004, when the Marshall Field's chain was sold.

In an age when celebrity CEOs become household names, Ulrich shunned the spotlight, saying company performance speaks for itself.

And for that, he has been well compensated. Since 1995, he's drawn a salary in excess of $1 million per year ($1.66 million last year), and he's accumulated bonuses of more than $47 million. In the past five years, he's exercised more than $200 million worth of long-held stock options, and still has 3.6 million options.

Ulrich will stay on as chairman of the board through January. But the next chapter of his life likely will center on his latest brainchild in Phoenix: the Musical Instrument Museum, collecting and displaying instruments from all of the world's cultures.

Ulrich is not a musician, but he has a passion for museums, said McMahon, who serves on the museum's board.

Again, it's typical Ulrich. He looked at the museum market, assessed the need, and set out to be an impact player.

Staff writer Patrick Kennedy and researcher Roberta Hovde contributed to this report. Jackie Crosby • 612-673-7335