Target, the prominent US retailer, has named a new chief executive officer amid ongoing challenges in reversing sales declines and improving its stock performance.
This leadership transition occurs against a backdrop of rising inflation and concerns regarding the potential impact of US tariffs on consumer spending, particularly affecting Target’s non-essential categories such as apparel and electronics.
Michael Fiddelke, currently the company’s chief operating officer, is set to succeed Brian Cornell in February. Fiddelke brings two decades of experience within the organization to the role.
Shares of Target initially experienced a nearly 11% drop following the announcement, before partially recovering. Cornell, who has served as CEO for the past 10 years, was widely anticipated to retire.
Fiddelke’s appointment signifies a return to Target’s historical practice of promoting internal candidates to the top leadership position. Cornell was the first external hire to hold the CEO title.
In a released statement, Fiddelke acknowledged that “work remains” for the company, emphasizing the need for a “faster, much faster” pace of execution.
He has committed to enhancing product quality and further integrating technology throughout Target’s operations.
Target is widely recognized for its affordable clothing lines and a broad assortment of competitively priced groceries, home goods, electronics, and toys.
However, the retailer has faced headwinds in the past year, grappling with increased competition from e-commerce giant Amazon and retail behemoth Walmart.
The company’s stock price experienced a notable decline at the beginning of the year and has since remained relatively stagnant.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, suggests that Fiddelke’s appointment may not inspire significant confidence among investors.
“There may have been hopes that a successor from a rival in the market could have brought extra knowledge, insight and energy, valuable assets at a time of intense competition,” she noted.
Michael Baker, an analyst at DA Davidson, echoed this sentiment, stating, “That announcement lacks the pop that a significant external hire would provide.”
Earlier this year, Target lowered its annual expectations following a marked decrease in sales, attributing the decline to a “highly challenging environment” exacerbated by the introduction of trade tariffs.
The retailer’s sales experienced a 5.7% drop in the three-month period leading up to May, coinciding with a period of backlash related to a previous decision to discontinue diversity, equity, and inclusion (DEI) targets.
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