May 5, 2014, 11:18 AM

Target’s CEO is out

Gregg Steinhafel, Target’s CEO since 2008, resigns in the wake of the holiday data breach and slowing store sales.

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Gregg Steinhafel, the president, CEO and chairman of the board of directors at Target Corp., has resigned, the retailer announced today, citing the need for new leadership. Target’s chief financial officer, John Mulligan, will take the reins as interim president and CEO while the board looks for a new leader.

Target in December suffered a massive data breach that allowed criminals to access 40 million customers’ credit and debit card numbers and related data by hacking into the payment systems used in Target’s U.S. stores. Target later said the breach could include information, such as names and e-mail addresses, of up to 110 million customers. Steinhafel, in his resignation letter to Target’s board, cites the breach and Target’s slow start in Canada as “difficulties” the retailer’s faced recently. Target opened its first stores in Canada last year but the retailer has said foot traffic and sales have been below expectations.

Company-wide comparable-store sales dropped 0.4% for the fiscal year ended Feb. 1, and total sales for the year increased less than 1%. Target’s online sales fared better, however. Target generated $2.30 billion in sales on the web in 2013, up 19.17% from $1.93 billion in 2012, according to Internet Retailer Top 500 Guide estimates. Target does not break out online sales from store sales in its earnings reports, although it did say e-commerce sales grew 20% year-over-year in the fourth quarter, while overall sales dropped 3.8% and comparable-store sales declined 2.5%. Target is No. 18 in the newly published Top 500 Guide.

Steinhafel’s departure follows that of Beth Jacob, who in March resigned from her position as Target’s chief information officer and executive vice president for technology services. Steinhafel became CEO in 2008 and has worked for Target for nearly 35 years.

“We are grateful to [Greg] for his tireless leadership and will always consider him a member of the Target family,” the Target board of directors wrote in the statement announcing Steinhafel’s resignation. Steinhafel and the board say Steinhafel will work with the retailer in an advisory position while it searches for a new chief executive.

 

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