10 Updates

Will Investors Regret Target's CEO Ouster? Compare to Sears, JCP

May 8 2014, 3:32pm CDT | by

There was much press this week about Target’s CEO and Chairman, Gregg Steinhafel, being forced out .  Blame reached the top job after the successful cyber attack on Target last year.  But ...

Filed under: news

 
 
 

11 weeks ago

Will Investors Regret Target's CEO Ouster? Compare to Sears, JCP

May 8 2014, 3:32pm CDT | by

There was much press this week about Target’s CEO and Chairman, Gregg Steinhafel, being forced out Blame reached the top job after the successful cyber attack on Target last year.  But null to a mounting global problem.

Cyber security is a problem for every company

Richard Clark is probably the USA’s foremost authority on cyber attacks.  He was on America’s National Security Council, and headed the counter-terrorism section.  Since leaving government he has increasingly focused on cyber attacks , and advised corporations.

In early 2013 I met Mr. Clark after hearing him speak at a National Association of Corporate Directors meeting.  He was surprisingly candid in his comments at the meeting, and after.  He pointed out that null .  He said it was impossible to do business without working on-line, and simultaneously it was impossible to think any company – of any size – could stop an attack from successfully getting into the company.  The only questions one should focus on answering were “How fast can you discover the attack?  How well can you contain it? What can you learn to at least stop that from happening again?”

Target was a crime victim, as can happen to any company

So, while the Target attack was large, and not discovered as early as anyone would like, to think that Target is in some way wildly poor at security or protecting its customers is simply naive.  Several other large retailers have also had attacks, include Nieman Marcus and Michael’s , and it was probably bad luck that Target was the first to have such a big problem happen, and at such a bad time, than anything particularly weak about Target.

We now know that all retailers are trying to learn from this, and every corporation is raising its awareness and actions to improve cyber security.  But some company will be next.  Target wasn’t the first, and won’t be the last.  Companies everywhere, working with law enforcement, are all reacting to this new form of crime.  So firing the CEO, 2 months after firing the CIO (Chief Information Officer), makes for good press, but it is more symbolic than meaningful.  It won’t stop the hackers.

Investors and customers have a lot to lose given Target’s competitive performance

Where this decision does have great importance is to shareholders and customers.  Target has been a decent company for its constituents under this CEO, and done far better than some of its competitors.  The share price has doubled in the last 5 years, and Target has proven a capable competitor to Wal-Mart while other retailers have been going out of business (Filene’s Basement, Circuit City, Linens & Things, Dots, etc.) or losing all relevancy (like Abercrombie and Fitch and Best Buy .)  And Target has been at least holding its own while some chains have been closing stores like crazy (Radio Shack 1,100 stores , Family Dollar 370 stores , Office Depot 400 stores , etc.)

Just compare Target’s performance to JCPenney, who’s CEO was fired after screwing up the business far worse than the cyber attack hurt Target.  And he was a former hero running Apple’s retail stores.

Or, look at Sears Holdings.  CEO Ed Lampert was heralded as a hero 6 years ago, but since then the company he leads has had 28 straight quarters of declining sales, and closed 305 stores since 2010.  The Kmart division has become a complete non-competitor in discounting, and Sears has lost all relevancy as a chain as it has been outflanked on all sides.  CEO Lampert has constantly whittled away at the company’s value, and just this week told shareholders that they can simply plan on more store closings in the future.

And vaunted Wal-Mart is undergoing a federal investigation for bribing government officials in Mexico to prop up its business. Wal-Mart is constantly under attack by its employees for shady business practices, and this year lost a National Labor Relations Board case regarding its hours and pay practices. And Wal-Mart remains a lightning rod for controversy as it fights with big cities like Chicago and Washington, DC about its ability to open stores, while Target has flourished in communities large and small with work practices considered acceptable.

Finding a good replacement for Steinhafel will not be easy

CEOs, and Boards of Directors, across the nation have been seriously addressing cyber security for the last couple of years.  Awareness, and protective measures, are up considerably.  But there will be future attacks, and some will succeed.  It is unclear blaming the CEO for these problems makes any sense – unless there is egregious incompetence.

Now, null .  Destroying KMart, while battling Wal-Mart, and still trying to figure out how to compete with Amazon.com is a remarkably difficult job.  Perhaps the toughest CEO job in the country.  Steinhafel had performed better than most.  Investors, and customers, may soon regret that he’s not still leading Target.

Connect with me on LinkedIn , Facebook   and Twitter />/>

How Lampert killed Sears Holdings

Why it is better to own AMZN than SHLD or WMT

Why the bribery case is a wake up call for WMT investors

How Wal-Mart became easy prey for Target

 
Update
10

7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was told ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by robb ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakyat toda ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Hus ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 mill ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaa ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Bangladeshi plane catches fire at Nepal airport, passengers safe
Kathmandu, July 28 (IANS) A Bangladeshi aircraft caught fire while landing at Kathmandu's Tribhuvan International Airport (TIA) Monday afternoon, officials said.
 
 
Shift work can worsen asthma, pneumonia
London, July 28 (IANS) A research has found that drugs widely used to treat lung diseases like asthma or pneumonia work better with the body clock.
 
 
Decoded: What triggers sexual arousal in you
New York, July 28 (IANS) Know why just looking at an attractive face stimulates sexual arousal? Well, it takes two to tango!
 
 
Turn your selfie into emoji with this app
New York, July 28 (IANS) Tired of seeing the same yellow-faced smileys? In an age of selfies, how can emojis be far behind?
 
 
 

Latest from the Network

Scoreboard: India vs England, day 2, third Test
Southampton, July 29 (IANS) The following is the scoreboard after the second day's play of the third cricket Test between India and England at the Rose Bowl here Monday: England (first innings, overnight 247/2)...
Read more on Sport Balla
 
UN call neglects Israel's security needs: Netanyahu
Jerusalem, July 29 (IANS) Israeli Prime Minister Benjamin Netanyahu Monday criticised the UN Security Council's call for ceasefire in the Gaza Strip, saying it strengthens Hamas and neglects Israel's security needs....
Read more on Politics Balla
 
Three dead, 16 injured in Nigerian suicide attacks
Abuja, July 29 (IANS) At least three people were killed and 16 others injured in two suicide bombings Monday in northern Nigeria's Kano state, officials said. In the first incident, a female suicide bomber attacked a...
Read more on Politics Balla
 
31 killed in Iraq violence
Baghdad, July 28 (IANS) At least 31 people were killed and 20 others wounded in the latest violent attacks and conflicts in Iraq, police source said Monday. Police patrols Monday found 14 unidentified bodies - 11 men...
Read more on Politics Balla
 
Narang clinches men's 50m rifle prone silver
Glasgow, July 28 (IANS) Indian shooters continued to bring home more medals as Gagan Narang won the country's third medal Monday clinching the men's 50-metre rifle prone silver in the finals at the Commonwealth Games...
Read more on Sport Balla
 
Renew humanitarian truce in Gaza: UN chief
United Nations, July 28 (IANS) UN Secretary General Ban Ki-moon Monday urged Israel and te Islamist Hamas movement to renew a humanitarian ceasefire in Gaza and called on those responsible to "step back from provoking...
Read more on Politics Balla
 
Indian paddlers lose men's team bronze playoff
Glasgow, July 28 (IANS) India's men paddlers suffered a disappointing finish in the team bronze medal playoff, losing to Nigeria 1-3 at the Commonwealth Games here Monday. India, who had won the bronze in the same...
Read more on Sport Balla
 
Ousted Thai PM faces power-abuse allegation
Bangkok, July 28 (IANS) Thailand's Election Commission (EC) is accusing former prime minister Yingluck Shinawatra of abusing power by using public funds to campaign for elections, local media reported Monday. EC...
Read more on Politics Balla
 
CWG: Ghosal, Anaka lose in squash
Glasgow, July 28 (IANS) Indian squash players Saurav Ghosal and Anaka Alankamony bit the dust Monday bringing to an end their individual campaigns in squash singles at the Commonwealth Games here. While Ghosal lost...
Read more on Sport Balla
 
England 452/5 at tea
Southampton, July 28 (IANS) England were batting at 452/5 at tea on Day 2 of the third cricket Test against India at the Rose Bowl here Monday. Ian Bell and wicketkeeper-batsman Jos Buttler were batting on 133 and 13...
Read more on Sport Balla