The "stunning" and "sudden" announcement that Gregg Steinhafel is out as CEO of the Target store chain -- a move widely attributed to the recent Target data breach where millions of customers' private information was exposed to crooks -- is an opportunity to address "other, bigger strategic issues," writes David Strasser, analyst at Janney Montgomery Scott, in a report to clients this morning. The apparent "last minute" decision leaves Target CFO John Mulligan as interim CEO while the board seeks a new boss.
Turns out Target's data encryption isn't the only place where the chain's tech is below standard: The company's core customers are "clearly in the grips of key online retailers," and its "e-commerce business... is far behind where it needs to be," according to Strasser. Target needs also to rapidly fix the problems with its new Canada stores and its struggling West Coast P-Fresh initiative and with Red Card, Strasser added.
In short, "Target needs a turnaround specialist, someone who could re-energize a workforce that has been demoralized by bad news, and make tough and quick decisions regarding a variety of strategies that need review." The fact Steinhafel's replacement is only "interim" implies a "lack of planning"; Strasser calls Mulligan "solid" and "a competent caretaker" for now.