Target CEO exits amid fallout from retailer's massive data breach (+video)(Read article summary)
Target CEO Gregg Steinhafel resigned on Monday, four months after a hacking scandal exposed financial data on some 70 million holiday shoppers, hurting profits and consumer confidence.
Target’s longtime CEO resigned Monday, about four months after the retailer revealed that a huge data breach had affected as many as 70 million of its holiday shoppers.
Target CEO Gregg Steinhafel, who had held that title for six years and was a 35-year veteran of the retail chain, said he is giving up all of his positions in the company, including his role as president and as chairman of the board of directors.
Mr. Steinhafel’s departure seems to be part of Target’s broader effort to buff clean its image after the hacking scandal left a big dark spot on its brand.
Until five months ago, Steinhafel’s tenure had been mixed, The Wall Street Journal reported. Although he was credited with helping to steer the third-largest US retailer through the recent recession, keeping it afloat by branding the outlet as a more upscale version of some of its colossal rivals, he was also blamed for leading an unsuccessful expansion into Canada. Canadians, it turned out, have less of an appetite than Target had expected for its red-and-white-logoed brand.
But the biggest hit to Steinhafel’s reputation came on Dec. 19, 2013, when Target revealed that hackers had stolen personal information from as many as 40 million customer credit and debit cards between Nov. 27 and Dec. 15. Almost a month later, Target informed shoppers that the breach had, in fact, been larger than that, putting the information of some 70 million shoppers at risk. It was the second-largest data breach at a retailer, after a 2007 hacker attack on TJ Maxx, which compromised the personal information of 90 million consumers, according to The Associated Press.
In February, Target reported that its fourth-quarter profits were down 46 percent, according to the AP. Though its sales have since inched upward, the retailer has said that it projects its recovery to be sluggish, AP reports.
Steinhafel’s ouster is the latest step in Target’s effort to woo back to its aisles consumers who have many other shopping options, coming just a month after the company said it had selected Bob DeRodes as its new chief information officer (its previous CIO, Beth Jacobs, stepped down in March). At the time, Target simultaneously rolled out plans for a chip-and-PIN system, a $100 million addition that would protect against future data breaches, and also introduced plans for other new technologies and security measures. A month before that, Target’s board also announced that the company was joining a nonprofit initiative to detect and deflect possible hacking attempts.
“After extensive discussions, the board and Gregg Steinhafel have decided that now is the right time for new leadership at Target," read a statement released by Target's board on Monday.
The board also thanked Steinhafel for his service both before and after the data breach.
"Gregg led the response to Target's 2013 data breach," read the statement. "He held himself personally accountable and pledged that Target would emerge a better company. We are grateful to him for his tireless leadership and will always consider him a member of the Target family."
Target said it had appointed its chief financial officer, John Mulligan, as interim president and chief executive. It appointed Roxanne Austin, a board member, as interim nonexecutive chair of the board.