360° Coverage : Will Investors Regret Target's CEO Ouster? Compare to Sears...

2 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 null...

Filed under: news

 
 
 

16 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 outBlame 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
2

4 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,000 by 30 per cen ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

5 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

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

No link between Ebola outbreaks in West Africa, DRC : WHO
Geneva, Sep 3 (IANS) The World Health Organisation Tuesday said the outbreak in Democratic Republic of Congo (DRC) is "a distinct and independent event", with no relationship to the epidemic in West Africa.
 
 
US CDC calls for global response against Ebola
Washington, Sep 3 (IANS/EFE) The head of US Centers for Disease Control and Prevention (CDC) Tuesday warned of the risk that the Ebola outbreak could get out of control without a greater worldwide response.
 
 
US doctor tests positive for Ebola in Liberia
Washington, Sep 3 (IANS) An American missionary doctor working in Liberia has tested positive for the Ebola virus, his organisation SIM USA announced Tuesday.
 
 
IS video shows beheading of second US journalist
Washington, Sep 2 (IANS) Days after the beheading of American photojournalist James Foley, Sunni militant group Islamic State (IS) has posted a video showing the beheading of another kidnapped American journalist Steven Sotloff, CNN reported.
 
 
 

Latest from the Network

Miltos Yerolemou joins 'Star Wars Episode VII' cast
Los Angeles, Sep 3 (IANS) Miltos Yerolemou, who was seen as swordsman Syrio Forel in TV show "Game of Thrones", joins the cast of "Star Wars Episode VII". Harrison Ford, Carrie Fisher and Mark Hamill return as Han...
Read more on Celebrity Balla
 
No link between Ebola outbreaks in West Africa, DRC : WHO
Geneva, Sep 3 (IANS) The World Health Organisation Tuesday said the outbreak in Democratic Republic of Congo (DRC) is "a distinct and independent event", with no relationship to the epidemic in West Africa. Based on...
Read more on Business Balla
 
US warplanes drop leaflets on Iraqi city
Baghdad, Sep 3 (IANS/EFE) US warplanes Tuesday dropped thousands of leaflets on the northern Iraqi city of Mosul, urging residents to keep clear of places occupied by the Islamic State (IS) extremist group that overran...
Read more on Politics Balla
 
US CDC calls for global response against Ebola
Washington, Sep 3 (IANS/EFE) The head of US Centers for Disease Control and Prevention (CDC) Tuesday warned of the risk that the Ebola outbreak could get out of control without a greater worldwide response. "This is...
Read more on Business Balla
 
Don't have a perfect body: Charlize Theron
Los Angeles, Sep 3 (IANS) Actress Charlize Theron says she doesn't have an ideal figure, but is happy with the way her body looks. The actress features on the cover of Modern Luxury's September 2014 issue and looks...
Read more on Celebrity Balla
 
Kate Hudson is 'basically married'
Kate Hudson says she and Matthew Bellamy are ''basically married.'' The 35-year-old actress, who has son Bingham, three, with the Muse frontman, 36, admits they're in no rush to plan to a wedding and she rarely wears...
Read more on Celebrity Balla
 
Cee Lo Green's reality show is axed
Cee Lo Green's reality TV series has been axed. TBS announced on Tuesday (09.02.14) that the 'Forget You' hitmaker's show, 'The Good Life,' which focused on his attempts to juggle his careers as a producer, recording...
Read more on Celebrity Balla
 
Chris Martin spends weekend with Gwyneth Paltrow
Chris Martin and Gwyneth Paltrow spent the weekend together in the Hamptons. The former couple, who announced they were ''consciously uncoupling'' in late March after 10 years of marriage, reunited at their home in the...
Read more on Celebrity Balla
 
Mali mine blast kills four UN peacekeepers
Bamako, Sep 3 (IANS) Four United Nations peacekeepers were killed and 15 others injured after their vehicle hit a landmine in Mali Tuesday, security sources said. The UN vehicle was hit by a landmine when the...
Read more on Politics Balla
 
Kate, Cara new faces of Burberry's latest fragrance
London, Sep 3 (IANS) Supermodels Kate Moss and Cara Delevingne have been roped in as the new faces of Burberry's latest fragrance. The models are pictured in the campaign for the label's latest scent My Burberry, shot...
Read more on Celebrity Balla