Doug Scovanner is, in fact, human

By most accounts, Doug Scovanner was a stellar executive. The outgoing Target CFO, who will retire in March, stared down activist investor William Ackman, boosted the profitability of Target's credit card business, and expertly managed the company's relationship with Wall Street.

But even superstars can sometimes drop the ball, even Scovanner. In 2002, Target signed a $300 million contract with Fleming Cos. to supply its stores with food, including candy, cookies, and frozen foods.

At the time, Target's grocery business was small so, partnering with Fleming, a long time supplier to Kmart, made sense.

"Fleming has a great reputation, and Target is not going to go with a second-tier player," Fred Sears, a fund manager with Eastern Point Advisors' Twenty Fund, told the Star Tribune at the time.

Sears' words are now ironic. Two years later, the Securities and Exchange Commission and Fleming settled charges that its top executives "cooked the books," that it conspired with customers to artificially inflate profits. Fleming, the SEC noted, was under pressure from Wall Street because Kmart's bankruptcy eroded its finances.

Fleming, which once owned Rainbow Foods, eventually imploded and filed for bankruptcy.

The Fleming fiasco set back Target four or five years in the grocery business, said Burt Flickinger, managing director of Strategic Resource Group in New York. Meanwhile, arch rival Wal-Mart became the country's largest grocer.

Though Scovanner's tenure at Fleming preceded the scandal by more than a decade, he was the best qualified among Target's leadership team to vet the Fleming deal, Flickinger said.

Today, Target has spent millions of dollars remodeling its stores, including its P-Fresh grocery format, a move that has boosted the company's same-store sales growth. But Target is still a relatively minor player in the grocery industry, a fact noted by Scovanner in a recent conference with analysts.