Insight Into Target Corporation (TGT) Canada Failures
The Retail industry faced many hiccups during 2014, not just in terms of weaker sales but also massive cyber-attacks that affected millions of customers across Target Corporation (NYSE:TGT), Staples, Inc. (NASDAQ:SPLS), Home Depot Inc (NYSE:HD) and Kmart Corporation.
Amid the industry wide slowdown, Target also failed in its first major foray into international territories as Target Canada division reported significant losses of $211 million in its first quarter earnings. The company reported 16% decline in its quarterly earnings, mainly attributed to losses in Canada operation and costs of data breach. Target also reduced its full-year guidance, as it expects future expenditures related to the data breach.
Analysts blamed Target Corporation (NYSE:TGT)’s failure to maintain adequate in-store inventory levels and incompetent pricing strategies that failed to compete against the likes of Wal-Mart Stores, Inc. (NYSE:WMT) and Costco Wholesale Corporation (NASDAQ:COST) in Canada.
In a response to its supply chain disaster, Target Canada fired its top executive Tony Fisher and announced to shut-down its 133-store Canadian operation. A mid-level employee at Target’s headquarters in Minnesota mentioned in a letter to Gawker that the company is in desperate need of help, starting from the top down. The employee blamed Target’s “very Minnesota, passive aggressive” work culture, which requires the retailer to hire 2 people for doing a job that 1 person could do at another company.
The letter also identified firing of former CEO Greg Steinhafel and CIO as good moves and also urged the firing of entire executive team except CMO Jeff Jones to bring reforms and pursue competent work culture to ensure competitiveness and sustenance in the current conditions.
An employee noted in a letter that if Target Corporation (NYSE:TGT) fails to make significant change in its leadership and culture, it may end up being a Sears or Kmart.
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