Boston, MA 05/12/2014 (wallstreetpr) – Reasons Behind Target Corporation (NYSE:TGT) Unceremonious Exit?
Can the new management be in a position to bring the chain of discount retail store operator Target Corporation’s (NYSE:TGT) out of the mess? There are at least two reasons that are doing the rounds on the exit of former chairman and CEO Gregg Steinhafel.
Data Breach
One among the reasons being floated in the media for the sudden departure of Gregg Steinhafel is the breach of data, which is considered very big, including leaked information about millions of customers’ debit and card in 2013.
Leaking of information about customers has become one of the big headaches for the managers since it is on the rise year after year. For instance, a new study done by International Business Machines Corp. (NYSE:IBM) and the Ponemon Institute has reportedly indicated a surge of 15% in data breaches to $3.5 million.
Among the pricey harms to business has undoubtedly become costs in connection with the experts’ help, any loss of customers, and the exact investigation. The company attributed the part of an increase in 15% data breach to the higher number of clients’ records being stolen.
In such a situation, normally it is the responsibility of the chief information officer, who is responsible for any data breach. However, in the case of Target, Gregg Steinhafel came on the wrong foot since the company’s CIO quit in March itself. Therefore, the company disclosed that Gregg Steinhafel took the blame by himself.
Canada’s Poor Patronage
Another reason being circulated in the media is Target Corporation (NYSE:TGT)’s misstep in Canada. Reuters report said that the 124 stores launched in Canada in 2013 was smaller than the stops that exist in the U.S. Another issue is that the company launched them in down-market malls whereas it would have helped serve the company’s ambitions if Target chose up and coming retail destinations.
The company also failed to have the necessary stock in the stores that the Canadians would have been more interested and at the prices they would have like them to be. Perhaps, both missteps have separated the customers from the company.
New Management
Target Corporation (NYSE:TGT) has appointed an interim management under the current CEO. For this, Its CFO Mulligan has been named as interim president and CEO, while Roxanne Austin has been appointed as non-executive chairman of the board. The company may be in search of a new CEO and till then, Mulligan will hold the key. It remains to be seen whether the new management can come of the mess. None-the-less, the missteps of Canada and data breech has undoubtedly forced Gregg Steinhafel to exit the company.
