Names from within company – as well as from Gap, Ford and Wal-Mart – surface as potential CEOs.
Now that Gregg Steinhafel has resigned as Target’s top executive, the emerging list of would-be successors centers on retail executives who are successfully navigating the notoriously difficult industry.
As J.P. Morgan analyst Christopher Horvers wrote Monday: Steinhafel’s departure “opens the door for a turnaround across the Target enterprise.”
Some of the more surprising candidates mentioned to head the $73 billion Minneapolis retailer include retiring Ford Motor Co. CEO Alan Mulally and former Target CEO Robert Ulrich. But when Wall Street analysts got right down to it, much of the focus centered on retail execs currently in the game, including Glenn Murphy, chairman and CEO of Gap Inc.; Bill Simon, head of Wal-Mart Inc.’s U.S. division; and Greg Sandfort of Tractor Supply Co.
During Murphy’s tenure at the Gap, the company acquired Athleta and Intermix, entering the women’s fitness apparel and luxury markets, respectively. Gap also opened its first store in China, and Old Navy expanded outside of North America, while headquarters concentrated on building a new e-commerce platform. Murphy recently made news when Gap announced it will voluntarily raise its hourly pay for U.S. employees to $10 by next year, saying it wants to “do more than sell clothes.”
Interestingly, Murphy has extensive experience in Canada, where Target has struggled, having served as chairman and CEO of Shoppers Drug Mart, Canada’s biggest drugstore chain. Before that, he spent another 14 years at Loblaw Companies Ltd., Canada’s largest food distributor and supermarket chain.
Then there’s Simon, head of Wal-Mart’s domestic division, who was reportedly passed over in Bentonville when Doug McMillon was named CEO.
Relatively new to the C-suite of the world’s largest retailer, Simon was previously a high-level executive at Brinker International, a Dallas-based restaurant company best known for its Chili’s chain. Simon’s résumé also includes a stint as secretary of the Florida Department of Management Services under former Gov. Jeb Bush.
Will Target raid its arch rival Wal-Mart? Some analysts suggest the fit might not be terribly seamless — since Wal-Mart competes ferociously on price, while Target sees itself as more of a lifestyle retailer. And Wells Fargo Securities analyst Matt Nemer argued in a report that Target’s “greatest challenge of the next decade is Amazon, and a CEO with deep domain experience in technology and e-commerce would be [an] asset.”
Retail’s CEO of the moment is Sandfort of Tractor Supply, the largest retail farm and ranch store chain in the United States with nearly 1,300 stores in 48 states. Sandfort has a strong merchandising background, having served as president and chief operating officer at craft chain Michael’s Stores, as well as other positions at Sears Roebuck and Co., Belk Stores and Federated Department Stores.
“They’ve developed kind of a cult following on the street,” said Wells Fargo’s Nemer.
Other outsiders include: Carol Meyrowitz, CEO of TJX Cos., the parent of TJ Maxx and Marshall’s; HSN Inc. CEO Mindy Grossman; Mickey Drexler, CEO of J. Crew; Victoria’s Secret chief Sharen Turney and CEO Brendan Hoffman of Bon-Ton Stores, a Lord & Taylor and Neiman Marcus alum.
In addition, several high-level executives at Home Depot were mentioned as possible candidates including Marvin Ellison, currently executive vice president of stores — who spent 15 years at Target in various operational roles.
Then there were the more unusual candidates like Ford’s Mulally, who cut his teeth at aircraft manufacturer Boeing Co. That may seem odd since he lacks retail experience, but at 68, Mulally was considered a potential successor to Steve Ballmer at Microsoft, another high-profile opening in American business.
For the record, Target has said only that it has hired executive recruiting firm Korn Ferry to advise the board on the hire — news that caused its own flurry of speculation that the retailer will, for the first time, bring in an outside executive to spark change.
A Target lifer
Steinhafel was a 35-year Target lifer who was groomed by former CEO Ulrich who was, in turn, schooled by the late Ken Macke.
Some analysts said on Monday that Ulrich himself, now 71, could triumphantly return to Nicollet Mall to right his alma mater. University of St. Thomas retail expert David Brennan said “it’s really unlikely he’ll come back,” and Ulrich could not be reached for comment.
Analysts also noted Monday that looking inside the company is not out of the question.