Dive Brief:
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Target Monday said it has promoted CFO John Mulligan to COO, a new role at the retailer.
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Cathy Smith, who has experience as CFO and other roles at several retailers, including Wal-Mart Stores Inc.’s international division and who most recently did a brief stint at pharmacy prescription management company Express Scripts Co., joins as CFO Sept. 1.
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The moves continue a major revamping of the executive suite under CEO Brian Cornell as Target gets assertive about its omnichannel and merchandising efforts. In April Target tapped grocery retail executive Anne Dament to be SVP of merchandising, and in June shifted longtime merchandising chief Kathee Tesija to advisor.
Dive Insight:
Target’s corporate culture has been described as “highly insular” and even “famously insular”, but since the arrival of (outsider) Brian Cornell about a year ago, that seems to be rapidly changing. Indeed, Target’s bull’s eye logo seems especially apt these days as it flings all kinds of arrows at its executive suite. Some moves are particularly surprising to many — like the replacement of longtime merchandising chief Kathee Tesija, who’s credited with leading Target’s innovative approach to designer-based collections for apparel and home.
But the retailer, which has been assertive of late in many areas — increasing the number of its smaller format urban stores, adding omnichannel fulfillment options like in-store pickup of online orders, and decreasing its free shipping minimum — seems to be only getting started.
Target is up against its next largest competitor — Wal-Mart Stores Inc. (which is also working to become more nimble in an omnichannel retail world) — and e-commerce giant Amazon, not to mention dollar stores, specialty stores, and grocery stores. In a decision in stark contrast to Wal-Mart and pharmacy retailers, the company unloaded its pharmacy operations to CVS Health, which will operate the pharmacies within Target stores.
While its major data breach in 2013 was a setback for the company, and its omnichannel efforts till now have been lagging, these moves by Cornell bode well for the retailer, writes Walter Loeb at Forbes:
“I believe the efforts of Brian Cornell, Target’s Chairman and CEO, are bearing fruit in many areas; especially in apparel, home and beauty,” Loeb said in May. “These are important business lines that give consumers a reason to come back when the merchandise is attractive, of good quality, and well priced. For quite a while, Target has lagged in digital sales; only now has the company reported the first encouraging signs of growth.
“I expect there will be some innovative developments in the digital area during this year. In order to compete with hard line stores like Walmart and Best Buy, Target must continue to show leadership through aggressive marketing and strong Internet communication. At the same time, I believe we will see Target introduce additional innovative fashion marketing that will reestablish the company’s fashion panache.”