Target Corporation is at a crossroads. They’re struggling with the fallout of a serious data breach, undergoing a board-room revolt and adjusting to changing consumer preferences. The retail behemoth formerly boasted as much as a $129 billion market cap back in July of last year. In recent years, its reputation and financial performance have come under a serious cloud.
Just this year, Target experienced a large scale data breach that left the cards on file and personal information of up to 110 million people exposed. The event eventually resulted in the resignation of the company’s long-time CEO, Gregg Steinhafel. He had led the company through several rounds of growth and geographic expansion. After Steinhafel’s resignation Brian Cornell took over as CEO. He arrived with the visionary touch that had served him well in his previous, groundbreaking leadership roles in the retail sector.
Cornell, now 66, recently decided to stay on longer as CEO. He consented to another three-year term in September 2022. Under his leadership, Target has tried to get back to basics within retail, such as making sure products are always available to customers. Developing Management Challenges continue to plague the company as it works through inventory. Each of these issues has led to markdowns and/or canceled orders, more than tripling profits.
If Target wants to win back consumers’ trust, it has made a good first move. As of January this year, the company repealed a number of diversity, equity, and inclusion (DEI) initiatives. However, this decision has made a number of community members furious. Andi Otto, a local activist, expressed concern, stating, “The community right now feels like they were lied to.”
Target is in deep, deep trouble. In the last quarter, inventory levels increased 11% year-over-year, exacerbating the pressure. The company is currently addressing those challenges through collaborative initiatives. They are experimenting with Warby Parker-style pop-up shops in a handful of markets and introducing a new apparel line in partnership with Champion, but we don’t yet know whether those moves will be successful.
Target’s recent announcement that it would donate $1 million to the Trump Inauguration fund has only served to deepen the divides in its customer base. It can open up new risks, analysts caution, as some of the more polarizing issues are pushed into the spotlight. Michael Lasser, an industry expert, noted, “It can create more risk as these polarizing issues become front and center.”
Target also drew intense criticism in 2023 after removing certain products from its Pride collection. The move followed safety threats received by workers. That decision received praise and criticism from supporters and opponents alike of the retailer’s move to inclusivity.
These challenges aside, Target has experienced many bright spots, especially in digital and e-commerce realms. A limited-time collection with Kate Spade emerged as the company’s strongest designer partnership in a decade, showcasing its ability to attract consumer interest. Yet despite this level of success, the retailer’s deeper woes are laid incredibly bare. The battles the firm wages to stay true to its roots as market forces and industry trends threaten to envelop them.
Former employees have called the move a reflection of Target’s changing character. As one former employee put it, “They have sort of forgotten who they are. Another shopper lamented the change in atmosphere: “There was a joy to shopping at Target. It made you feel good. And I don’t get that walking through Target.
In addressing these challenges above, Cornell has made clear his dedication to improving Target’s bottom line without sacrificing an innovative spirit. He stated, “Backed by strong assets, proven capabilities and a talented team, we’re confident in our ability to accelerate near-term performance while continuing to innovate and serve our guests—today and in the years ahead.”
Target is bravely and boldly tackling these knotty issues. Restoring consumer trust and strengthening its core brand identity are critical to the company’s long-term success.