The retailer takes steps to fix its flailing operations to the north.
Target Canada is getting ready for a reboot. After losing almost $1 billion in its newly formed Canadian operation, Minneapolis-based Target Corp. announced a series of steps Tuesday to repair its floundering business, starting with firing the president of its Canadian division.
Target said that 38-year-old Tony Fisher was out “effective immediately” and that he has been replaced with 15-year veteran Mark Schindele, who was most recently senior vice president of merchandising operations.
The company described Schindele, 45, as a “results-driven leader” who has played a major role in launching new store formats such as CityTarget, Target Express and PFresh, which has helped bolster Target’s push into food.
“Our focus is on moving forward,” said Dustee Jenkins, a company spokeswoman. “We’ve talked about the need to improve the guest experience and improve in-stocks (in Canada). Mark has quite a lot of experience there, so we thought he’d be a great person to come in and accelerate the transformation we need to drive in Canada.”
Fisher’s ouster was among a number of leadership changes Target announced Tuesday, and it comes on the heels of the firing of CEO Gregg Steinhafel just two weeks ago. In addition to naming a new head of its Canadian division, Target said it will soon appoint a nonexecutive chair in Canada who will be charged with initiating strategies that resonate in the Canadian market.
“We want to make sure we have the right product in the right place at the right time,” Jenkins said. “Then we will have an opportunity to reintroduce ourselves to the Canadian marketplace.”
The stakes are high, as Canada is Target’s first foray outside the United States and this is largely seen as a test as to whether it can thrive on an international platform. Target charged into the market last year, opening 124 stores in just 12 months. But its expansion has been riddled with problems almost from the start, from complaints of empty store shelves to concerns over higher prices.
Target lost $941 million in Canada last year. Its first-quarter financial report due Wednesday will show whether the division has lost more ground since.
Amy Koo, a senior analyst with Kantar Retail, said Target is paying heavily for its early missteps — so much so that some Canadian shoppers may not be willing to give the retailer a second or a third chance.
Target needs more than a quick fix, she said. “It can’t just be ‘Well, we fixed the assortment a little bit.’ It has to be a re-grand opening,” Koo said.
Analysts welcomed the news about Target’s changes up north, noting that it’s been apparent for a while that Target needed to do something drastic. But some wondered why Target didn’t pick a Canadian or somebody from outside of headquarters.
Brian Sozzi with Belus Capital Advisors said he was encouraged to see Target taking steps to stabilize its business, but added that the changes are late. He said it’s concerning that the company continues to promote people from within an “entrenched Target culture.”
In an interview posted to A Bullseye View on Target’s website on Tuesday, Schindele said he will relocate to Toronto for his new role. He said he will be focused on helping the team identify solutions and to move even faster. “Target is a world-class company, but we haven’t met our guests’ expectations in Canada,” he said.
While he doesn’t have Canadian roots, Schindele noted that he’s been in retail for a long time and that he will be relying on guidance from the new nonexecutive chair. “I understand how important it is to be in tune with our guests, so I’ll be tapping into the Target Canada team of 20,000 people, 90 percent of whom are Canadian,” he said.
Sean Naughton, an analyst with Piper Jaffray, wasn’t bothered by Target promoting one of its own and pointed to Schindele’s experience in global sourcing and operations.
Naughton also noted that Target has gone outside with some other recent hires, such as Bob DeRodes, the company’s new chief information officer, and its recently named senior vice president of new business integration and operations, Peter Glusker.
“I think they have been looking outside more than normal,” Naughton said.
Still, Target is doing triage on a number of fronts beyond just Canada. To thrive, analysts say, it must also reverse sluggish sales at its U.S. stores, rebound from last year’s massive data breach and better compete with online rivals such as Amazon.