PepsiCo’s Brian Cornell will take over as first outsider to lead Minneapolis retailer.
For the first time in its history, Target Corp. is tapping an outsider as CEO, a step widely seen as a bold statement by the giant retailer to reshape its culture and improve its fortunes.
On Thursday, Minneapolis-based Target named former Sam’s Club and PepsiCo executive Brian Cornell as its next chief executive and board chairman. Cornell will be charged with boosting Target’s U.S. sales, repairing its new Canadian operations and regaining consumer trust after last year’s massive data breach.
Even before he starts his new role on Aug. 12, Cornell already represents a sea change for the retailer, which has long been known for its insular culture and mostly promoting from within.
“They needed someone with a fresh perspective to come in with a whiteboard and say: ‘Here’s what’s working and here’s what’s not,’” said Brian Yarbrough, an analyst with Edward Jones.
Target’s board of directors had been talking to Cornell for several weeks and was unified in its choice that he was the right leader, said Dustee Jenkins, a Target spokeswoman.
“He can drive results,” Jenkins said. “He’s also very approachable. That’s also very important. We wanted a dynamic leader that the team could get behind.”
Cornell becomes the fourth CEO of Target since the early 1980s, when the business became the biggest operating unit of the then-Dayton Hudson Corp. Target did not make Cornell available for an interview Thursday.
Target’s search began in May, but Cornell had not been among the top contenders rumored to be in the running for the job. Still, retail analysts were mostly upbeat about his appointment, pointing to his long track record in retail that includes his tenure at Sam’s Club, where he was credited for boosting sales.
Cornell has a “well-rounded résumé to revitalize and re-energize Target,” said David Strasser, an analyst with Janney Capital Markets.
Some analysts, however, pointed to Cornell’s lack of home and apparel experience — a key sales driver for Target, which helped the retailer earn its distinctive cheap-chic reputation.
“It’s not necessarily a daring choice,” said Carol Spieckerman, president of retail consultancy newmarketbuilders, noting that some were hoping for a leader with more of an e-commerce or technology background to help boost Target’s digital operations.
Target’s stock dropped 2.9 percent on Thursday — its largest decline since the day after Target fired its previous CEO, Gregg Steinhafel, in early May.
Since Steinhafel’s departure, acting CEO John Mulligan has shaken up the executive ranks by appointing new leaders for Target’s Canadian business, a chief technology officer and a data security chief. He also began to move the company’s top executives onto one floor at the firm’s downtown Minneapolis headquarters building to improve communication and hasten decisionmaking.
Mulligan will stay on as chief financial officer, the company said.
Gerald Storch, a retail consultant who previously served as CEO of Toys R Us and vice chairman of Target, said Cornell has a reputation for being a team builder. He added that Target’s board was wise to pick a successor quickly, especially before the all-important holiday season.
“It’s very smart that the board hired someone rapidly and didn’t allow the period of limbo to extend too long,” he said.
Some analysts wondered if Cornell’s appointment was a sign that Target would further emphasize its grocery offerings, which it has expanded in many of its stores in the last several years.