Tuesday, May 6, 2014

Targets Parts With CEO For Data Breach

Mr. Steinhafel's resignation is the latest in a series of moves made by the company as it struggles to recover from last year’s holiday data breach. Credit Keith Bedford/Reuters
The chief executive of Target, Gregg Steinhafel, resigned from the company on Monday, signaling the depths of the damage done by last year’s extensive breach of customer information.
While the online attack has been the most prominent of the retailer’s problems, other issues — including sluggish customer traffic, a competitive online market and a badly disappointing expansion into Canada — have compounded the turmoil.
After extensive discussions between the board and Mr. Steinhafel, and as the company’s latest quarter drew to a close, Target’s board said on Monday that it had determined the company needed new leadership.
Target is scheduled to release earnings for its first financial quarter later this month, its second profit report since the breach, and in notes to investors on Monday morning, retail analysts said Mr. Steinhafel’s resignation did not bode well.
“Presumably the board was not pleased with Steinhafel’s performance, and we think that it is fair to assume that current business trends are not particularly good,” Faye Landes, an analyst at Cowen, wrote in a note to investors. “The board also may have come to the conclusion that the problems leading to the credit breach were the results of underinvestment, which is a C.E.O. decision, and the aftereffect of the breach may ultimately be quite costly, which we believe to be the case.”

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