Last holiday season, the personal information of over 110 million target customers were hacked, making it one of the biggest such breach of any retailer. Customers naturally were not happy with the news and the sales as well as the stocks of the company went down.
Now, the company suffers another blow as Gregg Steinhafel, the Chairman and CEO of Target resigns from the post. It is said that the decision was taken after extensive discussions with the company board and Steinhafel.
For the time being, John Mulligan, the current CFO of the company will act as the interim CEO. And in the meantime, the company board is looking for a new CEO from both inside and outside the company. According to sources, the new Chief could be from a non-retail sector too.
Steinhafel started his career at Target as a merchandising trainee back in 1979. Over the course of time, he became the president and finally the CEO of the retail giant in 2008. Although he is stepping down from the post, he will still act as an advisor to the permanent CEO to be appointed.
One of the main reasons for Steinhafel stepping down was that he considered himself ‘personally accountable’ for the breach. There were some other problems too like the debut of the Target brand in Canada last year, where the retailer opened 124 stores across the country and lost around $940 million.
So, somebody had to take the hit for the breach as well this problem, which eventually led to the resignation of the Steinhafel.
In a letter to the board, he said “Now is the right time for new leadership at Target,”
Also, the company blog post which announced the resignation of Steinhafel said, “The board is deeply grateful to Gregg for his significant contributions and outstanding service throughout his notable 35-year career with the company. We believe his passion for the team and relentless focus on the guest have established Target as a leader in the retail industry”.
It is said that Target spent over $61 million combating the breach. The financial loss coupled with the resignation of its CEO should be a setback for the company, but such drastic measures may be the only way to respond to this situation.
It would be interesting to see who replaces Steinhafel as the CEO of Target in the coming months. A strong figure who would be able to reconstruct target’s brand image could really bring things back to normal for the company.
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