Target Corp. (TGT) has found a veteran to fill in the position vacated by Gregg Steinhafel in May, reported the Wall Street Journal. The retailing company has appointed PepsiCo’s (PEP) executive Brian Cornell as its new chairman and chief executive officer. While the 55-year old personnel goes on to join Target, Pepsi now has to find a replacement of the highly reputed resource.
A Target store located in Miami, Source: Wikimedia Commons
Replacement to Overcome Tough Times
Target veteran Steinhafel was unseated from the position in May after some chief lieutenants stood against his careless decision to expand in Canada and an unpardonable hacker attack that led to data breach, revealing delicate data of millions of customers. In the meanwhile, Target’s CFO John Mulligan acted as the interim chief executive. Even before such untoward developments, Target looked like having lost the growth path as there were series of problems culminating over the past year.
Brian Cornell’s role is to clean the current mess the company is in. This is a big test for the executive, and simultaneously a huge platform to prove his mettle. Store traffic has been dropping for the retail giant for more than a year now as a fallout of internal slips, and security violation of its customers’ debit cards and credit cards. Other than this, changing preferences of consumers in favor of online shopping also hit store traffic.
Target has more than 1,900 stores operating in the U.S. and Canada, and is experiencing a difficult phase. During the holiday season, sales were plagued by the data breach, but it started returning to normal since March, when the retailer began attracting crowd through discount offers.
Is Cornell Up for the Challenge?
Cornell has spent decent number of years with PepsiCo, and could have been a possible successor of present PepsiCo CEO Indra Nooyi. After becoming the CEO of PepsiCo Americas Foods back in March 2012, Cornell efficiently ran the largest unit that sells brands including Frito Lay and Quaker. Before this, the executive was working as the president of Wal-Mart Stores (WMT), where he used to manage Sam's Club warehouse chain. Cornell has also been the chief executive officer of Michael's Stores Inc. for a couple of years.
Cornell will be taking on his new role from August 12. In his new term in a fresh company, he has some big questions to answer and decide on some real key issues that are acting a road bump to the company’s progress. Surely this is a big loss for PepsiCo. The company mentioned that it would soon find a successor for Cornell, and is also prepared to see its highly regarded executive work for Target.
Cornell has huge responsibilities on his shoulders, the most critical of which is to regain customers’ confidence, particularly after the data breach. The third largest U.S. retailer expects Cornell to revive its business and operational performance, while building its e-commerce base. Other than this, he is required to formulate strategies that would help improve the weak traffic and sales in the company’s U.S. and Canada stores.
This is the first time in Target’s history that the company’s elected an outsider to serve as the top boss of the company. Cornell has already resigned from his position as the head of PepsiCo's Americas Foods division. What remains to be seen is whether Cornell can stand up to the task and make the company sail through the current headwinds, and withstand the challenges to the best of his capacity.