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Continued: Target seeks new CEO to restore chain's luster

Investors pushed Target shares down about 3.5 percent Monday to close at $59.87. That’s well off the 52-week high of $73.50.

In interviews, analysts said that the resignation was not a total surprise but that it came faster than anticipated.

“I think the fact that they will be doing an outside search creates some uncertainty,” said Glenn Johnson, a portfolio manager with Mairs & Power in St. Paul, which owns Target stock. “That bit of uncertainty has investors a little bit nervous.”

“We were hopeful that current management would be able to get things moving in the right direction,” Johnson said.

Joshua Hill, a senior portfolio manager for Minneapolis-based Windsor Financial Group, a longtime Target stockholder, called the data breach the “last straw in a string of missteps by the company.”

“Over the course of the next few years, we expect the company will continue to make steps in earning back its customers’ trust and financial results should improve,” Hill said.

While much has been written about Target’s losses in Canada, Matt Nemer, senior analyst at Wells Fargo Security, said he thinks the lack of momentum in the United States is a bigger issue. The company needs to maintain a laser focus on its digital operations and re-energize its fading collaborations with designers, he said.

Nemer noted that Target recently started a service to order online and pick it up in the store, which other retailers have been using for years. The service drives half of Wal-Mart’s online sales, he said.

At the same time, he said, Target needs to get back to some of the merchandising basics that drove its success. Target doesn’t need a revolution, he said, but some re-engineering: “I don’t think this is a J.C. Penney or Sears situation where the brand is just broken.”

“Where are all the great design collaborations?” Nemer said. “It feels like it’s a frequency problem to me. Why aren’t we seeing one every two months and bigger names?”

Burt Flickinger, managing director at Strategic Resource Group, agreed that Target’s challenges go well beyond the data breach and execution problems in Canada. He dinged the company for being too insular. The board has no retailers, he said, and the company’s management pipeline has been inbred, as well.

“They’ve been operating with the loose air of superiority for far too long,” Flickinger said, adding that between the breach and Canada: “Target’s been giving Wal-Mart the biggest gift it can give.”


Star Tribune staff writers Evan Ram­stad and Paul Walsh contributed to this report.

Jennifer Bjorhus • 612-673-4482

Janet Moore • 612-673-7752



    1979: Joined what became Target as a junior buyer of paints.

    1994: Named executive vice president of merchandising.

    Aug. 1999: Named president of Target.

    Jan. 2007: Named to Target’s board of directors.

    July 2007: Activist investor William Ackman announces he’s purchased Target stock and begins pushing for change and representation on the board.

    May 2008: Steinhafel succeeds Robert Ulrich as CEO.

    Feb. 2009: Steinhafel named chairman of Target’s board of directors.

    May 2009: Ackman loses proxy battle for control of Target board.

    Jan. 2011: Target announces plans to open 100 to 150 stores in Canada.

    Dec. 19, 2013: Target acknowledges massive data security breach.

    March 21, 2014: Target issues a statement that “Gregg Steinhafel has the full confidence of the board.”

    May 5, 2014: Steinhafel steps down as chairman and CEO.

    Gregg Steinhafel biography

    about steinhafel

    Age: 59

    Born: Mequon, Wis.

    Education: Carroll University, Waukesha, Wis.; M.B.A. from Kellogg School of Management at Northwestern University.

    Residence: Orono

    Family: Married, three children

    Directorships: Serves on board of directors at Toro Co., the Retail Industry Leaders Association and TreeHouse, a faith-based nonprofit in Edina.

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