Target Launches New Initiative To Improve Sagging Sales
Following its first quarter when company-wide sales were down nearly 3%, Target is launching Enterprise Acceleration Office to drive “even greater speed and agility” across the retailer.
As part of the new initiative’s launch, Christina Hennington, Target’s chief strategy and growth officer, will step down and move into a strategic advisor role through Sept. 7. Michael Fiddelke, chief operating officer, will oversee the new project as the retailer works to improve how functions collaborate to advance key priorities, including simplifying cross-company processes and using technology and data in new ways.
"The Enterprise Acceleration Office represents a strategic commitment to operating more nimbly across the organization, creating conditions for speed, adaptability, innovation and resilience,” said Brian Cornell, Target’s chair and chief executive officer. “It goes beyond improving efficiency to build operational muscles that clear the way for our talented team to deliver for our guests while accelerating our performance and growth."
Additionally, Target is making several changes to its leadership team to “more closely align key capabilities that will support further speed and connection across the organization.”
- Prat Vemana, chief information and product officer, will report directly to Cornell and take on leadership of the Target in India global capability center.
- Jim Lee, chief financial officer, will assume leadership of Target's enterprise strategy and partnerships.
- Rick Gomez, chief commercial officer, will oversee Target's enterprise insights team.
Target also announced the departure of Amy Tu, chief legal and compliance officer. Melissa Kremer, chief human resources officer, will fill Tu’s role temporarily while the company conducts a comprehensive external search.
The launch of the Enterprise Acceleration Office comes less than three months after Target said it was implementing “strategic plans” in an effort to drive $15 billion in sales growth by the end of the decade.
The multi-pronged plans announced in March included enhancements to its product assortment, investments in technology, store remodels, and continued evolution of its supply chain. At the time, Cornell said the new strategy was about creating a modern “Tarzhay.”
In the first quarter, net sales for the three months ended May 3 were down 2.8% to $23.8 billion, reflecting a merchandise sales decrease of 3.1% and a 13.5% increase in other revenue. Transactions were down 2.4%, and the average transaction amount fell 1.4%. First-quarter operating income of $1.5 billion was 13.6% higher than last year.
Comparable sales decreased 3.8%, reflecting a comparable store sales decline of 5.7% and comparable digital sales growth of 4.7%.
By product segment, Target reported sales decreases in five of six key categories, with food and beverage the only category reporting a gain during the quarter.
"In the first quarter, our team navigated a highly challenging environment and focused on delivering the outstanding assortment, experience and value guests expect from Target," said Cornell. "While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by a 36% increase in same-day delivery through Target Circle 360, and our strongest designer collaboration in more than a decade, kate spade for Target.”
