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Target's Top Executive Steps Down, Brought Low By Data Breach
Originally published on Mon May 5, 2014 11:49 pm
ROBERT SIEGEL, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MELISSA BLOCK, HOST:
And I'm Melissa Block. Five months after Target disclosed a massive data breach, its CEO has lost his job. Greg Steinhafel is stepping down from his dual posts as president and CEO at Target Corporation. His resignation underscores the company's effort to overhaul its entire business. Here's NPR's Yuki Noguchi.
YUKI NOGUCHI, BYLINE: Target has been trying to recover from a disaster last December at the height of the holiday shopping season, a data breach involving at least 40 million customers so it's natural to think that's what's behind Steinhafel's departure. But Avivah Litan says it's more complicated.
AVIVAH LITAN: I don't think that the data breach is the only reason that his took place.
NOGUCHI: Litan is an analyst with Gartner. She says Target is losing on several fronts. Its launch in Canada proved disappointing. Revenues declined last year. Then, there was the data breach.
LITAN: I imagine that his was the straw that broke the camel's back, but I wouldn't say this was the main reason that he stepped aside. I think it was probably the tipping point.
NOGUCHI: Shawn Notten is a senior analyst with Piper Jaffray. He gets Steinhafel high marks for how he handled the breach, communicating with the public, offering free credit reports and discounts to customers. Still, he says, Target hasn't fared as well as their competition when it comes to Ecommerce.
SHAWN NOTTEN: They are behind from that standpoint and they are playing catch-up so we think that that has contributed to some of the underperformance of the company overall.
NOGUCHI: Notten says Target succeeded on brilliant merchandising, by drawing customers in to buy the basics, then seducing them into purchasing specialty items in store. But the retailer hasn't made that formula work as well online.
NOTTEN: That's it in a nutshell. There's more places for consumers to buy the products that are in their stores.
NOGUCHI: Target admits is rough patch. Dusty Jenkins(ph) is a Target spokeswoman. She points to the appointment last week of a new chief information officer to handle, among other things, the new chip in pin card technology Target is now investing in to better protect consumer data. She says today's announcement is part of that transition.
DUSTY JENKINS: Greg and the board have continued to have conversations about the path forward for the company and just decided that now is the right time for new leadership at Target.
NOGUCHI: Greg Steinhafel who has been with Target for 35 years will stay on as an advisor. Target's chief financial officer will serve as interim CEO until a replacement is named. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.