Inside Brian Cornell’s Target restructuring plan
Brian Cornell became CEO in 2014, becoming the first outside CEO in Target’s (TGT) history. In his 10 years on the job, Cornell has reinvented the company in many ways while experiencing the ups and downs of competing with other big retailers, including Walmart (WMT), Amazon (AMZN), and Costco (COST). To learn more about the veteran CEO’s journey and future plans, Yahoo Finance Editor-in-Chief Brian Sozzi met with Cornell at a Target store in Jersey City, New Jersey. The two also met at a park that played a big role in Cornell’s upbringing in Queens, New York, to explore what shaped him as the leader he is today. “When you grow up the way I do, you always feel like you’re the underdog,” Cornell said. This mindset helped Cornell rise through the retail ranks. Before running Target, he held executive positions at major companies such as Safeway and Walmart’s Sam’s Club. Cornell took over at a time when the retailer was struggling and recovering from a data breach. The CEO’s first big move was to pull out of Canada after a $5.4 billion venture north of the border failed to take off. In 2017, Cornell announced a $550 million acquisition of delivery company Shipt and a $7 billion investment in Target stores at a time when the industry seemed to be moving away from brick-and-mortar stores. These decisions paid off during the pandemic, with Target’s revenue surpassing $100 billion for the first time in 2021. Recently, Target has missed its targets compared to its competitors, with four consecutive quarters of comparable sales declines through the first quarter of 2024. Target’s numbers are down due to a variety of factors, including retail theft, a backlash against Pride merchandise in 2023, and markdowns due to excess inventory, with the main driver being a slowdown in consumer discretionary spending. Nearly 50% of Target’s product portfolio consists of non-essential items, far higher than many of its competitors. To drive growth into the future, Cornell and Target are combining old and new strategies. The company plans to invest in 300 stores over the next decade, continuing the trend under Cornell. In April 2024, Target unveiled Target Circle 360, a paid membership program to rival Amazon Prime and Walmart+. The latest numbers show positive signs for the retailer, with sales up 2.7% year over year in the second quarter of 2024. Target is set to report third-quarter earnings on November 20, and the company expects further growth to come, albeit at a slower rate. To continue reading our Lead This Way series, click here, and join Yahoo Finance Live Monday through Friday for more expert insights and the latest market trends. Read more: Target Circle 360 vs. Walmart+ and Amazon Prime: Which Membership Program is Right for You? Editor’s Note: This article was written by Luke Brooks.
