Target announced that its Chief Merchandising and Supply Chain Officer, Kathryn “Kathee” Tesija, would step down after 30 years with the company, effective July 6. Tesija will remain in an advisory role with her current salary and bonus until next April. She was promoted to Executive Vice President of Merchandising in April 2008 after holding various positions within Target’s merchandising division. Her responsibility expanded to include supply chain management in 2012, and she has held her current role since October 2012. Tesija was an influential figure during Target’s chic value fashion days and was a protégé of former CEO Gregg Steinhafel. The two executives’ career paths overlapped in the merchandising area. Tesija’s exit announcement came as a surprise, given Target’s merchandising success with collaborators such as Missoni and Lily Pulitzer. Some analysts suspected that supply chain issues had proved challenging for Tesija, who was a career merchandising analyst without much experience in figuring out “how much” and “in which stores.” Analysts noted that it was likely even more difficult for her to juggle the two jobs at once. Target has an ambitious supply-chain strategy: the company announced that it would invest $1 billion in technology and supply chain initiatives, accounting for 50% of its capex in 2015. To ensure the success of this investment, the company will need an executive with a strong background in technology and supply chain. CEO Brian Cornell hinted during Target’s March analyst meeting that the company is continuing to look for outside talent while holding current leadership accountable. In the press release regarding the event, Cornell said that “Kathee and I had many discussions about the business and together have decided that it is the right time for her to transition to an advisory role.” The company has started a comprehensive external and internal search to fill the position. Cornell has worked to reclaim Target’s status among big-box retailers since he joined the company in August 2014. With extensive experience at Walmart’s Sam’s Club, Cornell was tasked to develop Target’s core competitive edge: home furnishings and fresh grocery. His hires this year include former Tesco and Safeway executives. The new CIO, Mike McNamara, spent 15 years as the CIO of British grocer Tesco. The new Senior Vice President of Merchandising, Anne Dament, led Safeway’s Homecare and General Merchandising business operations and served as Group Vice President of its Perishable Strategy section. We believe that Brian is on the right path and that he has always had an eye towards discovery and innovation. Target’s shares were up 0.6%, to $84.86, midday on June 25.

TARGET RECENT MANAGEMENT CHANGES

Source: S&P Capital IQ