It’s officially being called a resignation. However, we all know Gregg Steinhafel was shown the door after six years as Target (TGT) CEO and more than 34 years at the company. Although Steinhafel is a lifer it’s clear the Target CEO badly mishandled its data breach forcing the board’s hand.
Target CEO Capabilities
First, since the position is open, it’s worth considering what skills would be useful for a new Target CEO.
I’m pretty sure the new hire won’t be Ron Johnson, who spent 15 years at TGT and another 11 at Apple (AAPL), before failing miserably at JCPenney (JCP). With part of the problem being lax internal measures, the board likely will look to a retail veteran with strong IT influences. Someone who can take the Minneapolis retailer to the next level without compromising its customers’ data.
In addition, he or she should be very familiar with Canada’s retail environment. Since Target announced it was opening stores north of the border, I’ve been very enthusiastic about its chances. Unfortunately, the former Target CEO and his minions seemed blissfully ignorant to the task before them costing the company almost $1 billion in its first year of operations.
Although Target did almost everything wrong in its first year open, my recent visits to several Toronto-area stores seems to show progress is being made when it comes to solving some of the more obvious problems such as barren shelves. On the days I was there, the shelves seemed quite full.
The new Target CEO will need to keep a close eye on its Canadian operations, because that — not the data breach — is the driver of TGT stock.
And in addition to IT and Canada, the next Target CEO needs to have big volume experience on both sides of the border.
Target CEO Possibilities
Given the prerequisites I’ve specified above, the field isn’t nearly as wide as one might think. My two favorites:
- Shelley Broader: The best candidate I can think of is Shelley Broader, current CEO of Walmart’s (WMT) Canadian operations. In 2012, the latest year available, WMT Canada generated $22.3 billion in revenue making it the largest retailer in Canada. Prior to working with Walmart, Broader was the president and COO of Michael’s and before that spent 17 years working for Hannaford Bros. in the grocery business. It just so happens that Target Canada’s grocery business has been one of the few bright spots since opening its first stores in April 2013. Broader’s experience working for Target’s biggest competitor north of the border could be very handy as it continues to make inroads there. Male or female, Canadian or American, she’s the best candidate for the job.
- Glenn Murphy: A long-shot possibility is Glenn Murphy, CEO of Gap (GPS). Before joining GPS as the top dog in July 2007, Murphy was the CEO of Shopper’s Drug Mart (Canada’s largest drug store chain), and before that he spent 14 years at Loblaw Companies (LBLCF), which ironically enough just acquired Shopper’s for C$12.4 billion in cash and stock. Between Shopper’s and Gap, he has turned in two impressive performances as CEO. Whether he could be persuaded to become Target CEO is the big question mark at this point. It would cost a great deal but likely very beneficial to TGT stock.