Target Promotes John Mulligan to Chief Operating Officer -- 3rd Update
August 17 2015 - 3:52PM
Dow Jones News
By Paul Ziobro
Target Corp. Chief Executive Brian Cornell promoted his finance
chief, John Mulligan, to the newly created role of chief operating
officer, as the retailer continues to remodel its executive
team.
Mr. Mulligan, 49 years old, will be succeeded as chief financial
officer by Cathy Smith, the former CFO of the pharmacy-benefits
manager Express Scripts Holding Co. Ms. Smith, who is 51 years old,
has also held senior finance roles at Wal-Mart Stores Inc. and
GameStop Corp. The appointments are effective Sept. 1.
Mr. Mulligan, who served briefly as interim CEO last year before
Mr. Cornell joined Target, will be given oversight of a broad range
of businesses, including stores, the supply chain and properties.
He had been CFO since 2012.
The creation of a chief operating officer is also an
acknowledgment of the broad challenges retailers face in a rapidly
changing environment. Target and others must ensure the execution
of basic tasks like making sure shelves are stocked and stores are
staffed, while also managing a shift to a more complex supply chain
where online shopping has retailers scrambling to fulfill orders in
different ways.
Wal-Mart Stores Inc. has also seen the importance of its
operating chief rise over the past year. Judith McKenna, who was
promoted to chief operating officer of Wal-Mart U.S. in December
2014, has become a key member of the executive team working on the
retailer's mission to make its stores cleaner and faster in advance
of the holiday season.
Target's shift to smaller, more urban stores also requires the
retailer to rethink a supply chain that has long relied on shipping
mass quantities of goods to large, suburban locations.
The change isn't only complex, but expensive. Target is spending
around $1 billion this year on supply chain and technology
investments.
Target had previously bundled oversight of merchandising and
supply chain under one position, which until recently was held by
Kathryn "Kathee" Tesija. Current and former Target executives, as
well as some suppliers, said that was too much responsibility for
one person to handle. Ms. Tesija stepped down from her position
last month and Target is currently searching for a top
merchant.
In a memo to employees, Mr. Cornell said the changes "will allow
us to accelerate operational improvements and strengthen the
fundamental areas of our business."
Ms. Smith spent less than a year as Express Scripts's finance
chief before leaving in December, citing a desire to pursue other
interests. At Target, she received a $500,000 signing bonus and
will be paid an annual base salary of $725,000.
Mr. Cornell, a former senior PepsiCo executive , has just
finished his first year at Target. He has focused the company on
just five key categories, including baby, kids and wellness
products, and has also placed a greater emphasis on fixing Target's
lagging digital business.
He has also pulled the company out of Canada, announced a sale
of Target's pharmacy business to CVS Health Corp. and laid off
thousands of employees. His progress will be measured Wednesday,
when Target reports second-quarter results. The shares have gained
35% in the past 12 months.
Tess Stynes and Sarah Nassauer contributed to this article.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 17, 2015 15:37 ET (19:37 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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