After ousting the head of its Canadian operations, the temporary leader of the Target Corp. says he hopes customers will give the U.S. retailer another chance. He’s also creating a new executive advisory role to guide the company to more stable ground north of the border.
“We recognize that we’ve disappointed Canadian guests,” John Mulligan, the company’s interim CEO said Wednesday after delivering weaker first-quarter results.
“We think we’re a great retailer. We have not lived up to our potential, nor our expectations.”
Mulligan stepped into the interim CEO role earlier this month, after serving as the company’s chief financial officer. He replaced Gregg Steinhafel who resigned from the position.
Massive changes have taken hold at the third-largest retailer in the United States over the past few weeks as it focuses on recovering from a security breach in the U.S. that has hurt its reputation, and a bungled Canadian rollout last year that failed to ignite sales.
On Tuesday, the company announced that Mark Schindele would become leader of the Canadian operations, after previously holding the position of senior vice-president of merchandising operations. He replaced Tony Fisher who was fired from the job.
Mulligan explained that Target Canada is heading back to the drawing board to reconsider how to appeal to Canadians.
Target is also searching for a Canadian executive to fill a newly created advisory role that will provide counsel and support to the president of Target Canada.
“We’re looking for someone with deep Canadian experience who can help guide us,” Mulligan said.
“We want to ensure they have a great feel for the Canadian marketplace.”
He characterized some of the plans that are underway, including a focus on better managing its inventory levels to ensure that customers don’t encounter bare shelves at its stores like they have since last year.
“I’ve been in the stores and I’ve seen them,” Mulligan said. “It’s unacceptable.”
Other changes underway include a revamped flyer that will emphasize items that keep customers returning to its stores more frequently, like detergent, diapers and groceries.
For the quarter, Target Corp.’s overall profits declined 16% to US$418 million, or 66 cents per share, and the company reduced its annual profit outlook and issued a second-quarter projection that fell short of analysts’ expectations.
In the Canadian division, operating losses increased 3.1 per cent to $211 million as bad weather and weak sales during the Easter season affected results. Sales grew 357% to $393 million, but still missed Wall Street estimates of $432 million.
Target characterized its Canadian results as in-line with its own expectations.