Target fires president of Canadian operations, names replacement
Anne D'Innocenzio, The Associated Press
Published Tuesday, May 20, 2014 8:14AM EDT
Last Updated Tuesday, May 20, 2014 11:49AM EDT
NEW YORK -- Target has fired the president of its troubled Canadian operations, Tony Fisher, and is replacing him with a 15-year U.S. company veteran in a bid to address inventory issues and bring customers back into its stores.
The executive shakeup in Canada comes two weeks after the abrupt resignation of Target's CEO and Chairman Gregg Steinhafel.
The third-largest U.S. retailer announced Tuesday that Mark Schindele, 45, who was senior vice-president of merchandising operations, will now run the Canadian operation. Target's expansion into Canada last year marked its first foray outside the U.S. but it has struggled with weak sales and losses. The changes are effective immediately.
Schindele has played a key role in launching a new store format including an expanded grocery area, as well as Target Express and CityTarget in the U.S. He has also led a global team and provided senior-level oversight to Target's merchandising operations, including systems, global sourcing and product development.
Schindele will report to Kathee Tesija, chief merchandising and supply chain officer, whose responsibilities include Target Canada.
Target, based in Minneapolis, also said that it will be naming a non-executive chair in Canada. In its newly created advisory role, the chair will provide counsel and support to the president of Target Canada to ensure all strategies and tactics align with the Canadian marketplace.
The company also announced the promotions of three senior merchandising executives in its U.S. division as it tries to be more nimble in bringing in trendy products into stores more quickly.
Target is trying to fix its flailing operations in Canada, its first foray outside the U.S., while revitalizing business in the U.S. It's also trying to recover from a massive data breach in the U.S. that has cost it customer trust.
The botched Canadian expansion and the data breach were the two main factors behind Steinhafel's departure. Target's Chief Financial Officer John Mulligan is serving as interim CEO as Target searches for a new leader. Steinhafel agreed to serve as an adviser during the transition.
Under the leadership of Fisher, 38, the company opened more than 100 stores north of the border. But shoppers have complained that prices are too high, and the Canadian stores have been wrestling with inventory problems.
As a result, sales have been weak, and the company's Canadian operations recorded a loss of $941 million in its first year, shaving off $1.13 per share from the company's results.
"We are grateful to Tony for leading Target's first international launch," Mulligan said in a statement. "One of our key priorities is improving performance in Canada more rapidly, and we believe it is important to be aggressive.
"Mark's broad understanding of the retail industry and his record of leading global operations will help accelerate efforts to drive improvements across our Canadian business."
Brian Yarbrough, a research analyst at Edward Jones in St. Louis, said he saw the changes as positive, noting Schindele has had a good track record with the company.
And while the addition of a non-executive chair position for Canada is a bit "odd," he said, it shows how committed Target is to addressing past mistakes.
"This board is really stepping up to the plate and saying: We've had some troubles in the U.S. with the data breach, and in Canada operations have been nothing but a total disappointment. We have to make some changes fast and we need to move much quicker to improve the transition," he said.
"There's still good opportunity in Canada in the longer term, and it's positive to see that they're making changes and they're making swift change."
But supply chain logistics remain a key problem for the company, Yarbrough said, and Target needs to get its Canadian stores in better shape before they can really push the message around value and draw customers back in.
Dustee Jenkins, a Target spokeswoman, said Schindele will move to Toronto and will focus on inventory, operations and improving the guest experience.
In the U.S., Target said, Trish Adams has been promoted to executive vice-president, apparel and home, while Jose Barra has been promoted to executive vice-president, essentials and hardlines. Keri Jones has been promoted to executive vice-president, merchandising planning and operations. All three had been senior vice-presidents.
"Moving more quickly to bring bold, innovative ideas to the marketplace will help us connect with our guests in more meaningful ways," Tesija said in a statement.
Target's net income fell 34.3 per cent to $1.97 billion in the year ended Feb. 1. Revenue slipped one per cent to $72.6 billion.
Target is expected to report first-quarter financial results Wednesday. The company said the timing of the changes were unrelated to the company's first -quarter results.