By Paul Ziobro And Lisa Beilfuss
Target Corp. is parting ways with its chief merchant, the
highest level executive change since Chief Executive Brian Cornell
started last year.
Kathryn "Kathee" Tesija is relinquishing her role as chief
merchandising and supply-chain officer July 6. She has been with
the company for more than 30 years and was once considered a strong
candidate to eventually become CEO.
Target declined to make her available, and she couldn't be
reached.
The decision removes an executive who helped Target build its
coveted Tar-zhay reputation but also held influential roles during
years in which many investors and insiders felt the discounter had
lost its way. Her departure gives Mr. Cornell more room to shape
his executive ranks and Target's offerings.
Ms. Tesija, 52 years old, will remain at the company as an
adviser until April, retaining her salary and bonus through that
period.
In a memo to employees, Mr. Cornell said that Target will be
looking to fill Ms. Tesija's role with someone who can "sharpen our
focus on signature categories," referring to those that the
retailer has identified as key to its successful turnaround.
Until a replacement is found, Mr. Cornell said he would oversee
Ms. Tesija's direct reports. He will also convene a weekly meeting
of top executives across several business to evaluate the business
and make changes more quickly.
Target's shares were up 0.6% at $84.86 in midmorning
Thursday.
Ms. Tesija was a pivotal figure in the ousting of former Target
CEO Gregg Steinhafel. The two executives were close as they rose up
through Target's merchandising ranks. Many inside the organization
considered her to be his protégé and eventual successor.
Their relationship fractured in the year leading up to Mr.
Steinhafel's departure. The two clashed over various issues,
including a move to penalize key supplier Procter & Gamble Co.
for letting Target rival Amazon.com Inc. set up shop in one of its
distribution centers. P&G products were given less prominent
placement in stores over the perceived offense.
In the months after the massive December 2013 data breach, Ms.
Tesija and other executives approached board members to tell them
they had lost confidence in Mr. Steinhafel's leadership and
implored them to replace him.
Ms. Tesija has been a controversial figure for some investors,
who felt that she was a key part of the old regime that caused
Target to lose its way. At an analyst meeting in March, Mr. Cornell
addressed those concerns, saying that Target would continue to look
for outsiders to bring in, but would also hold the current leaders
accountable as well.
"We've got the right team in place, we're going to hold
ourselves accountable and we are going to focus on execution," Mr.
Cornell said at the time.
Target is in the middle of a turnaround after a long stretch of
weak traffic amid heavy competition from online rivals like Amazon
and a feeling that the stores had become less distinctive. Mr.
Cornell joined last summer from PepsiSHYCo Inc., and has moved
quickly to address problem areas. He closed the money-losing
expansion into Canada, cut several thousand jobs and is selling the
chain's 1,660 in-store pharmacies to CVS Health for $1.9 billion.
The moves are meant to help refocus Target on a narrow set of
priorities, including key categories like fashion and apparel.
In the three months ended May 2, Target reported a 2.3% increase
in sales at established stores, ahead of its forecast, as more
customers visited and spent more on their trips. Online sales rose
nearly 38%.
Write to Paul Ziobro at Paul.Ziobro@wsj.com and Lisa Beilfuss at
lisa.beilfuss@wsj.com
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